Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. Fourth Quarter and Full Year 2025 Earnings Results Call. Please note that this call is being recorded. It is now my pleasure to turn the conference over to Courtney Moberly. Please go ahead.

Thank you, Erica. Welcome to ANI Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings Results Call. This is Courtney Moberly, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer; Stephen Carey, Senior Vice President and Chief Financial Officer; and Chris Mutz, Senior Vice President and Head of ANI's Rare Disease business. You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com. This call is accompanied by a slide deck that can be accessed by going to the Events section of the Investors page of our website. You can turn to our forward-looking statements on Slide 2. Before we begin, 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's 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. Going 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. During this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as an alternative to financial measures required by GAAP. The non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available on the slide deck accompanying this call. 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 reported on February 27, 2026. 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'll turn the call over to Nikhil Lalwani.

Thank you, Courtney. Good morning, everyone, and thank you for joining us. 2025 was another year of outstanding execution and growth by the ANI team, highlighted by our remarkable results in the fourth quarter. At the core of everything we do is our purpose of serving patients and improving lives. With our progress in the last year, we are well positioned to continue delivering on that purpose in 2026 and beyond. Starting with Slide 4. In 2025, the company delivered record revenue adjusted non-GAAP EBITDA and adjusted non-GAAP diluted EPS, driven by strong performance across our rare disease and generics business unit. For the full year, we grew total company revenues by 44% year-over-year and adjusted non-GAAP EBITDA by 47% year-over-year. In addition, we delivered exceptional growth for our lead rare disease asset, Cortrophin, with full year revenues up 76% year-over-year as we meaningfully expanded our reach in underpenetrated specialty indications and served more patients. With our strong R&D and operational capabilities, our generics business continued to outperform, growing 28% year-over-year in 2025. Turning to Slide 5. We believe the momentum we generated in 2025 positions us for continued growth in 2026. Our priorities for this year are threefold. First and foremost, ANI's transformation into a leading rare disease company. For our lead asset, Cortrophin Gel, we plan to maximize its multiyear growth opportunity by addressing the significant unmet need across indications. We will continue to build on our momentum in the key underpenetrated specialty indications in nephrology, neurology, rheumatology, ophthalmology, and pulmonology. In addition, we are building and deploying a 90-person organization dedicated to acute gouty arthritis flares. For this expansion, we plan to capture a sizable and unique additional opportunity in gout by expanding awareness and adoption of Cortrophin for appropriate patients by newly identified physicians in specialty and primary care. For ILUVIEN, we are focused on returning the product to growth by leveraging the commercial and patient access initiatives established in 2025. Importantly, we continue to believe in the long-term potential of ILUVIEN as we believe the addressable patient populations across DME and NI UPS are at least 10 times the current number of patients treated with ILUVIEN today. Our second priority is continued execution in our generics business by leveraging our superior R&D capabilities, operational execution, U.S.-based manufacturing, and business development expertise, as well as maintaining our current cadence of 10 to 15 launches annually. We continue to make progress on this priority and anticipate another year of strong performance and cash generation from our generics business that will enable us to further invest in our rare disease business. Our third priority is executing a disciplined capital allocation strategy. We are focused on driving organic growth by investing in our dedicated organization for Cortrophin in acute gouty arthritis flares and investing a high single-digit percentage of generics revenue into generics R&D and to drive inorganic growth by exploring opportunities to expand the scope and scale of our rare disease business. Turning to Slide 6. We believe the 2026 strategic priorities will drive long-term growth and value creation for the company. In 2026, we expect to deliver over $1 billion in revenue, representing 23% growth over 2025 at the midpoint of our guidance range. Rare disease is expected to account for approximately 60% of our total revenues in 2026 with Cortrophin growing 60% year-over-year. We also expect to expand the bottom line with adjusted EBITDA forecasted to grow 23% year-over-year at the midpoint of our guidance range. Later in the call, Steve will provide more detail on our 2026 guidance. In summary, 2025 was a pivotal year for ANI as we delivered record performance and drove significant growth across the business lines. We are entering the year from a position of strength and are focused on executing on our three strategic priorities. We anticipate that our virtuous cycle of growth, in which our generics and brands businesses generate meaningful cash flows to support our rare disease business, will drive our transformation into a leading rare disease company. I'll now turn the call to Chris to discuss our rare disease business in more detail. Chris?

Thank you, Nikhil, and good morning, everyone. Starting with Slide 7. Looking at 2025, I'm proud of our team as we closed out the year strong, delivering another excellent quarter, marked by significant growth for Cortrophin Gel as we expanded our reach in underpenetrated specialty indications. During the fourth quarter, the number of cases initiated and new patient starts reached another record high, and we saw broad growth across all of our targeted specialties: rheumatology, nephrology, neurology, pulmonology, and ophthalmology. Prescribing for Cortrophin gel and acute gouty arthritis flares remained a key growth driver this quarter. This indication is unique to Cortrophin gel among ACTH therapies and represented approximately 15% of total utilization. Notably, gout has also been a strong catalyst for new prescriber additions, including many providers who were previously unfamiliar with ACTH. We also continue to realize meaningful revenue synergies in ophthalmology, with fourth quarter Cortrophin gel volumes in ophthalmology over 2 times that of the same period a year ago. Ophthalmology remains a fast-growing targeted specialty for Cortrophin gel, and we believe there is further upside as we expand awareness of Cortrophin gel for patients with severe allergic and inflammatory eye conditions. Turning to Slide 8. Looking at the market more broadly, the ACTH space has returned to growth following the launch of Cortrophin Gel in 2022 and approached $1 billion in sales in 2025. We expect it to increase significantly in 2026 with Cortrophin gel growing by 55% to 65%. Turning to Slide 9. We continue to believe that the addressable patient populations across our key indications remain significantly underpenetrated. For example, there are roughly 10 million patients in the U.S. with chronic gout; about 36% receive treatment annually, and they have 1.5 to 2 flares on average per year. About 8% of those patients with severe gout receive injectable treatment for their flares. This group of 285,000 patients represents our addressable patient population. Importantly, prescribers who were previously naive to ACTH represent approximately half of our total Cortrophin gel prescriber base, and this cohort continues to expand. We believe the most significant opportunity for growth is through overall expansion of the ACTH market by addressing unmet needs of appropriate patients. To capture the multiyear growth potential of Cortrophin gel, we continue to focus on three key strategic priorities outlined on Slide 10. We are investing in high ROI commercial initiatives. Building on the commercial expansion we executed in 2025, we are now taking the next step to capture the unique opportunity for Cortrophin Gel and acute gouty arthritis flares with our new 90-person dedicated organization. There are several reasons why we are confident about the opportunity in acute gouty arthritis flares. As I highlighted earlier, there is a large addressable patient population of 285,000 patients. Second, Cortrophin gel is the only approved ACTH therapy for acute gouty arthritis flares. And third, we have a proven track record in this indication. Prescribing for acute gouty arthritis laris represented approximately 15% of Cortrophin gel use in 2025. In addition, we ran successful pilots across 10 territories in primary care and podiatry. This gave us further confidence to expand our organization to capture the opportunity in acute gouty arthritis. The hiring process is underway, and we expect to deploy this team by midyear. While we anticipate the expansion to impact Cortrophin gel volumes in the second half of 2026, we expect a greater impact in 2027 as the team reaches full productivity. Additionally, we continue to focus on enhancing patient convenience. Our Cortrophin gel prefilled syringe offering, which we launched in April of last year, simplifies administration and provides a more convenient option for patients. The launch of the prefilled syringe has been well received by both patients and prescribers and continues to support broader adoption and serve as an important growth driver for Cortrophin Gel. Finally, we continue to invest in generating robust clinical evidence to support physician decision-making and confidence in Cortrophin Gel. As part of this effort, we are advancing a 150-patient Phase IV study in acute gouty arthritis flares. This trial, along with ongoing collection of preclinical and real-world data across core indications, is designed to reinforce Cortrophin Gel's differentiated nonsteroidal mechanism of action and provide insights that may support adoption and treatment guidelines. We also continue to generate robust preclinical data for our key stakeholders on Cortrophin Gel's differentiated mechanism of action across multiple disease states. This remains a critical growth initiative. As expanding the body of evidence supporting Cortrophin gel use across indications helps physicians make more informed treatment decisions. On Slide 11, turning to our retina franchise. We are continuing to advance several initiatives to support ILUVIEN sales. Our fully onboarded commercial team is focused on educating and engaging the retina community, and we are ramping up peer-to-peer educational programs and field activities with updated marketing materials to enhance physician understanding of ILUVIEN and its two indications. In June of last year, we began promoting ILUVIEN under the combined label for chronic NI UPS and DME. Our sales teams have been educating customers nationwide, while our market access team worked with payers to establish coverage for the new chronic NI UPS indication. All 7 Medicare Administrative Contractors or MACs have now updated their policies to cover ILUVIEN for NI UPS. Among the top 20 commercial payers, all those with ILUVIEN-specific policies have updated them to reflect both DME and NI UPS indications. We also implemented initiatives to help physician practices navigate ongoing Medicare market access challenges that have persisted since January 2025. As a reminder, patient support foundations, such as good days, had limited funding in 2025, affecting their ability to assist Medicare patients with co-pay support across retina products. Our team has gained traction with leading retina practices, helping them explore pathways to secure ILUVIEN for eligible patients under the Medicare Part D benefit using a specialty pharmacy, the same approach used for Cortrophin gel access. In addition, we continue to share results from our NewDay study of ILUVIEN in patients with DME, which were presented at prominent medical meetings, including most recently at the Flow Retina International Congress in December and the Hawaiian Retina Conference in January. With that, I'll turn the call over to Steve for the financial update. Steve?

Thanks, Chris, and good morning to everyone on the call. I'll review our fourth quarter and full year 2025 results and 2026 guidance in more detail. In 2025, we delivered on our financial commitments, generating robust top and bottom line growth and significant cash flows. Starting on Slide 12. ANI recorded revenues of $247.1 million in the fourth quarter, up 30% over the prior year period. For the full year 2025, ANI generated record revenues of $883.4 million, up 44% versus 2024. Revenues from Cortrophin Gel in the fourth quarter were a record $111.4 million, up 88% from the prior year period. In 2025, Cortrophin gel delivered $347.8 million of net revenue, up 76% year-over-year, driven by strong adoption across neurology, nephrology, rheumatology, pulmonology, and ophthalmology. ILUVIEN net revenues were $19.8 million in the fourth quarter and $74.9 million for the full year 2025. Revenues for generics in the fourth quarter were $100.8 million, an increase of 28% over the prior year. The outperformance for the quarter was driven by continued strength in the partner generic launch that occurred in the third quarter of 2025. Full year revenues in 2025 for generics were $384.1 million, an increase of 28% over the prior year, reflecting our strong R&D capabilities, execution, and steady cadence of new product launches. Now moving down the P&L on Slide 13. As a reminder, when I speak to our operating expenses, I will be referring to our non-GAAP expenses, which are detailed in Table 3 in our press release. Generally, our non-GAAP operating expenses exclude depreciation and amortization, stock-based compensation, and certain costs related to litigation and M&A activity. Please refer to Table 3 for a full reconciliation to our GAAP expenditures. Non-GAAP cost of sales increased 43% to $99.8 million in the fourth quarter of 2025 compared to the prior year period, primarily due to net growth in sales volumes and significant growth of royalty-bearing products. Non-GAAP gross margin in the fourth quarter was 59.6% and a decrease of approximately 400 basis points from the prior year period, principally due to product mix, including significant growth of royalty-bearing products, including Cortrophin and a partner generic product that was launched in the third quarter, as well as lower brand revenues. For the full year of 2025, non-GAAP cost of sales increased 44% to $339.5 million compared to the year before, and non-GAAP gross margin was 61.6%, down approximately 10 basis points from the prior year. Non-GAAP research and development expenses were $11.7 million in the fourth quarter, a decrease of 27% from the prior year period, driven by timing of rare disease and generic programs. For the full year of 2025, non-GAAP research and development expenses increased 18% to $49.5 million compared to the year before due to higher investment to support future growth of our rare disease and generics businesses. Non-GAAP selling, general and administrative expenses increased 28% to $70.2 million in the fourth quarter, driven by spending for our new larger ophthalmology sales team, promoting Cortrophin Gel, and ILUVIEN and continued investment in rare disease sales and marketing activities, including the expansion of the rare disease team in the first quarter of 2025. For the full year of 2025, non-GAAP selling, general and administrative expenses increased 46% to $264.6 million. Adjusted non-GAAP diluted earnings per share were $2.33 for the fourth quarter compared to $1.63 per share in the prior year period. For the full year of 2025, non-GAAP diluted earnings per share were $7.89 compared to $5.20 the year before. Adjusted non-GAAP EBITDA for the fourth quarter was $65.4 million, up 31% compared to the prior year period, and was $229.8 million for the full year, up 47% compared to the prior year. We ended the fourth quarter with $285.6 million in unrestricted cash, up $140.7 million as compared to the $144.9 million as of December 31 of the prior year. Cash flow from operations was $30.4 million in the fourth quarter of this year and $185.2 million on a full-year basis. As of December 31, 2025, we had $629.1 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the fourth quarter, our gross leverage was 2.7x, and our net leverage was 1.5x our full-year adjusted non-GAAP EBITDA of $229.8 million. This morning, we are pleased to reaffirm our 2026 financial guidance, which reflects significant top and bottom line growth. Our guidance outlined on Slide 14 is as follows: net revenue of $1.055 billion to $1.115 billion representing year-over-year growth of approximately 19% to 26%. Cortrophin Gel net revenue of $540 million to $575 million representing year-over-year growth of 55% to 65%, driven by continued volume gains. Consistent with prior years and typical industry dynamics, we expect first quarter Cortrophin general revenues to be down sequentially from the fourth quarter and to represent approximately 13% to 14% of total 2026 revenues, slightly lower than in 2025, when the first quarter accounted for approximately 15% of full-year revenues. This effect is driven by two factors: first, we are experiencing typical seasonality related to the impact of insurance reverifications, which appear to be taking slightly longer as compared to the prior year. Due to increased Cortrophin patient volume in the physician's offices and in some parts of the country due to weather-related physician office closures that temporarily delayed the reverification process. While these factors impacted January, we have since seen a 25% jump in volumes dispensed and acceleration in new patient starts in February and are confident that the momentum will persist in March as physician offices complete work through the reverifications backlog. Second, our full-year Cortrophin guidance is inclusive of initial script volume expected to result from our 90-person organizational expansion to support our gout-focused indication. Revenues associated with this expansion will first occur in the third quarter and are expected to build momentum throughout the fourth quarter. As we look further out into the year, we remain confident in our full-year guidance and the significant multiyear growth opportunity for Cortrophin Gel. We expect very significant sequential growth in the second quarter as typical first quarter dynamics subside. We then expect further sequential gains in the third and fourth quarters, driven by continued performance of our portfolio, pulmonology and ophthalmology teams, in addition to the full deployment by the end of the second quarter of our new 90-person organization focused on acute gouty arthritis flares. We expect ILUVIEN net revenue of $78 million to $83 million, representing year-over-year growth of approximately 4% to 11%. We expect adjusted non-GAAP EBITDA of $275 million to $290 million, representing year-over-year growth of approximately 20% to 26%. And from a quarterly cadence perspective, we expect adjusted non-GAAP EBITDA to be down sequentially in the first quarter and modestly down as compared to the first quarter of the prior year driven by quarterly revenue dynamics. We then expect sequential growth in the remaining quarters of the year, with the fourth quarter representing the highest quarter by a significant amount driven by incremental contributions from our gout-focused team expansion. We expect adjusted non-GAAP earnings per share between $8.83 and $9.34, representing year-over-year growth of approximately 12% to 18%. We expect adjusted gross margin to be 59.3% to 60.3% in 2026, which is down from 2025, driven by significantly higher forecast sales of royalty-bearing products, the non-recurrence of revenues from our first-half 2025, 180-day exclusive launch of a specific product, and the expectation of lower brand sales. We currently anticipate a full-year U.S. GAAP effective tax rate of approximately 26% to 28%. And consistent with prior quarters, we will tax affect our non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share, utilizing our estimated statutory rate of 26%. We anticipate between 21.5 million and 21.8 million shares outstanding for the purpose of calculating full-year non-GAAP diluted EPS, and finally, please note that we will continue to exclude from our adjusted non-GAAP diluted EPS calculation the dilutive shares included in GAAP diluted EPS, which are expected to be offset in full by the cap call transaction. With that, I'll turn the call back to Nikhil.

Thank you, Steve. Turning to Slide 15. In closing, we delivered a remarkable 2025 characterized by significant growth across Cortrophin Gel and outperformance in our generics business. We've entered 2026 in a position of strength and remain focused on achieving our strategic priorities, including accelerating our transformation into rare disease, continuing to execute in generics, and deploying capital in a disciplined manner. Overall, we expect to deliver over $1 billion in revenue in 2026, with rare disease representing approximately 60% of total revenues. With that, operator, please open the line for questions.

And we'll take our first question from Glen Santangelo at Barclays.

Nikhil, it's apparent that Cortrophin continues to outperform expectations, and you seem to suggest that there's a long-term opportunity as you enter these less-explored indications. You're clearly investing in the sales force to capitalize on this. While you're not providing guidance past 2026, can you share any high-level thoughts on the potential of this long-term opportunity? I assume you're beginning to consider a peak sales figure, even if it may be a bit early to tell. What are your thoughts on that? Additionally, regarding Stephen's question, the royalty is set to increase this year. Can you clarify how that royalty will rise so we can better project gross margins moving forward?

Yes. Thank you for your question, Glen. Look, I think we believe in the significant multiyear growth opportunity for Cortrophin, but I think the key really is Slide 9 in our deck from this morning, where we highlight the addressable patient populations across indications. And these are significantly underpenetrated, not just by us but across the ACTH category. So we believe that there is a much larger number of patients that are appropriate for ACT therapy that are yet to benefit from this therapy. So we see a significant multiyear growth run rate for the category and also for Cortrophin. And we're investing to build momentum in 2026 and beyond, right? So high ROI commercial initiatives like the 90-person organizational expansion for gout, but we did an expansion last year. We're enhancing convenience, we launched a prefilled syringe last year. We're continuing to evaluate opportunities to further enhance patient convenience. And importantly, we're generating both scientific and clinical evidence; we advanced a Phase I clinical trial; we're advancing a Phase I clinical trial for Cortrophin in gout as well as a robust pipeline of investigator-initiated trials across disease states. So we believe in the strong multiyear growth opportunity and are investing to ensure that we capture that opportunity. And again, we believe in the opportunity for the category as a whole to keep growing for several years. And then your second question on the Merck royalty in 2025, annual revenues of Cortrophin Gel reached a level by which we surpassed the highest royalty tier for incremental net sales; the way in 2025 itself, we were in the highest royalty tier for the royalty. And then we currently anticipate the blended royalty rate to be in the high 20s in 2026.

And we'll take our next question from David Amsellem with Piper Sandler.

I have two questions regarding Cortrophin. First, I would like to understand your thoughts on operating leverage moving forward. With the addition of 90 representatives targeting primary care and podiatrists, how labor-intensive do you see promoting the gout indication, and what implications does that have for potential expansion? Second, could you discuss the treatment duration or the number of vials used for indications like sarcoidosis and ophthalmic diseases compared to gout? I'm interested in understanding the value of a patient across different opportunities within the Cortrophin franchise. Any insights you could provide would be appreciated.

Thank you for your question, Dave. Regarding operating leverage, we remain in high-growth mode and are focused on balancing growth and profitability. For 2025, our guidance suggests an EBITDA growth of 20% to 26%, and the EBITDA margin percentage will remain consistent between 2025 and 2026 despite significant investments in our 90-person organization for gout and associated operational expenses. The total increase in operational expenses at the midpoint of our guidance is around $50 million, primarily for the gout expansion. Nevertheless, we are maintaining the same EBITDA margin percentage in 2026 compared to 2025. We anticipate that the organization expansion for gout will contribute partially in 2026, with a full impact expected in 2027. We will have the sales force in place by mid-year, leading to contributions in the third and fourth quarters, with full effects realized in 2027 to enhance operating leverage. The crucial factor for further expansions is the addressable patient population. Our combined team currently engages with nephrology, neurology, and rheumatology, known as our portfolio team, which was expanded in 2025. There remains a larger addressable patient population available to us across various areas, which allows us to reach more physicians and patients, providing advantages for future expansions as we pursue this multi-year growth opportunity. This year’s investments will help maintain the EBITDA margin percentage while we expect to see a more significant impact in 2027, even with the same level of selling, general, and administrative expenses this year. Your second question pertained to the duration of treatment across different indications. Indeed, the duration varies; sarcoidosis typically requires longer treatment and more vials per patient, whereas acute gouty arthritis flares generally involve fewer vials per patient. Thus, there is variation in the indications that we address with Cortrophin Gel. Thank you, David.

And we'll go next to Vamil Divan from Guggenheim Securities.

Great. I have another question about Cortrophin. Building on the previous one, can you clarify if the new 90-person team you’re putting together is solely focused on the gout opportunity in primary care? I'm curious to know if they will also explore other specialties or indications beyond just gouty arthritis, or if their efforts are limited strictly to arthritis. I'm trying to understand how this additional investment can be leveraged. Additionally, I have a question for Steve regarding business development. You mentioned an interest in expanding the rare disease opportunities. Could you share your current leverage position and how you are balancing that with equity versus exploring the size of potential deals and financing options for these opportunities?

Thank you, Vamil. So on the 90-person organization, that's for gout. And as a clarification, not all 90 are in sales. So the majority of that personnel grew as sales expansion, but there are obviously patient support operations and marketing and other support areas, too. But yes, that organization and the sales organization, along with the rest of the organization, can be leveraged both for other indications that they treat or primary care that do treat other indications that Cortrophin is indicated for. Our focus is primarily on gout, but there are other indications potentially that they can treat, which would be appropriate for the patients. But can be leveraged for that. But in addition, that sales force can also be leveraged by adding another product in the basket just like we did for ophthalmology. So that option is available. Obviously, our opportunity in acute gouty arthritis flares is very significant. We've identified 7,000 HCPs that treat the most severe acute gouty arthritis flare patients, and that is our primary focus of this expansion, and that is what we will be focusing on as we put this team in place by midyear. And look, we've made very good progress on the recruitment. We have our sales leadership and area business directors in place, and we're now moving to recruitment of the sales team members, and we will launch by midyear. So on the acute gouty arthritis flares expansion. And then I'll turn it to Steve to answer your question on business development. Steve?

Yes, thanks for the question. We're incredibly pleased with the cash flow dynamics of the company in 2025. We're ending the year with $285 million on the balance sheet, and the business generated $185 million from operations in 2025. And as you see in our full year guidance, right, we're projecting continued both revenue and profitability measures growth, and so we expect very healthy cash flows in 2026 as well. And so at this point in time, right, given the strategic imperatives of the company to expand rare disease, we anticipate accruing that cash to the balance sheet to build that war chest for future business development and M&A activities. I think what you've seen us do consistently, you can look back to when we purchased Novidium in 2021, when we purchased Alimera in 2024, right? We take a balanced approach to how we finance these types of activities. And in terms of leverage ratio, right, we like to take a reasonably conservative approach there. I think what we've done in the past is we'll take leverage up to the 3-ish range, maybe a touch above 3% on net leverage but always with a clear line of sight in terms of organic delevering. And if you look back, right, to the close of Alimera, we were just right around 3x net levered, and here, just 5 quarters downstream, we've cut that leverage in half really driving with organic growth in the business. So I think you should expect similar moves in the future.

And we'll take our next question from Dennis Ding with Jefferies.

We have 2. So on Cortrophin, thanks for the color on Q1, it seems like the winter storms were an unexpected impact, but bad things are recovering. So I'm wondering when you take a step back and think about the first versus second half split, it seems like it will be meaningfully second half weighted, and that does put pressure on the gout expansion going as planned. So how do you give investors confidence that will go as planned, and the PCPs will be okay with prescribing a very expensive product? And then question number 2 is specifically on gross margins. So the royalty to work, I believe, is capped around 30%, so we shouldn't really get any more incremental headwinds moving forward. But how are you thinking about buying that royalty down given how much cash flows you guys are generating? And is that a priority for you? And how do you also convince Merck to come to the table?

Thank you for your questions. Dennis, our new dedicated field force for acute gouty arthritis flares is set to be deployed by midyear. We believe there is a significant market opportunity as Cortrophin is the only approved ACTH product for this indication. Additionally, we have a proven track record in gout, along with expected volume growth in 2025 from our work in rheumatology and nephrology. Furthermore, we had successful pilot programs across over ten territories in primary care and podiatry offices back in 2025, which focused on the most severe acute gouty arthritis flare patients. Those programs were successful and boosted our confidence to deploy this larger sales force in an area where we have the exclusive indication and are the only ACTH product available. With the field force set to launch by midyear, we anticipate similar results in Q3 and Q4 as we did when we expanded our portfolio sales force in 2025. We expect to see the full benefits by 2027. As we grow our field force, we are also investing in generating clinical evidence through a Phase IV trial to increase usage over time related to gout. Regarding your second question about the Merck royalty, we are continually evaluating potential opportunities, but we do not comment on any ongoing or inactive business development initiatives, particularly with our partners. Thank you for your question, Dennis.

And we'll move next to Ekaterina Knyazkova.

Just 1 from me. So just on Cortrophin gel, have you seen any recent changes on the patient access front, just are you seeing any payers or plans getting more triple or coverage or reimbursement? Or are you seeing kind of trends that are similar as you were seeing last year?

Thank you for your question, Ekaterina. We strive to balance sharing helpful information with maintaining competitive confidentiality. Overall, we have not observed significant changes regarding access. We are focusing on reaching the right patients as a late-line therapy with Cortrophin gel, but thank you for your inquiry.

And we'll go next to Thomas Smith with Leerink Partners.

Two on Cortrophin, if I could. You mentioned about 15% of utilization came from acute gouty arthritis in 25. Could you just give us a sense of what your expectations are for where that number goes in '26 and '27 given the sales force expansion efforts? And then could you give a little bit more color on the Cortrophin pilot programs executed in primary care and podiatry? Any details, I guess, on specific feedback from those prescribers versus your other specialty types and any specific learnings you're implementing to help better target those offices.

Good morning, Tom, and welcome to your first ANI conference call. It's great to have you here. The first question is about our current business. Currently, about 15% of our volume comes from gout. As we implement our targeted sales force and broader organization, we anticipate significant growth in this area. While we aren't specifying a number right now, we will keep you informed on our progress. It's important to note that a key factor in the success of the ANI Cortrophin story has been our ability to connect with new physicians. Nearly half of the doctors who have prescribed Cortrophin were previously unaware of the category before the introduction of Cortrophin gel. Regarding your second question about the pilot programs, we are working to reach roughly 7,000 healthcare professionals we’ve identified across regions. While some of these were part of the pilot programs conducted in 10 territories, most have not been, which means there's further potential for expansion. The success we've had in engaging new physicians is expected to continue, especially as we connect with more primary care and podiatry physicians. This growth will not only enhance gout volumes as a percentage of Cortrophin volumes, but will also increase the number of physicians, particularly those previously unfamiliar with ACTH. Concerning your second question about the pilot programs, we've gained valuable insights into discussions with primary care and podiatry physicians about identifying suitable patients. We've learned how to collaborate with their offices to navigate the enrollment and fulfillment process. Given that there is a large number of healthcare professionals in the country, it’s crucial to identify the 7,000 who treat the most severe acute gouty arthritis flare patients. We're figuring out how to pinpoint these doctors using claims and other available data to ensure we reach the right patients. These insights have been a part of our learnings from the pilot programs that we plan to apply through 2025. Thank you for your question, Tom.

And we'll take our next question from Les Sulewski from Truist Securities.

Congrats on the progress. Three for me, Cortrophin first, you noted that 15% of utilization is coming from gout. How would you expect that trend to uptick once the new team is in place? And is this a good representation of the percentage of the total consultant revenues? And then will you have some of the results from Phase IV trial in time for the sales force expansion? And the second, on ILUVIEN, can you provide an update on the specialty pharmacy progress and perhaps just kind of your thoughts on the patient access? And then lastly, on generics, how are you thinking about product cadence and erosion as we move through the year?

For questions, I'll address them one by one. Regarding gout, we believe that the 15% of current volumes will increase as a percentage of total volumes with this investment. We expect a significant uptake and will keep you updated as we progress. The Phase IV trial is moving forward, and we will share meaningful updates as it continues. We've already brought on sales leadership and area business directors, and we plan to fully launch the organization by midyear. The trial results will not be available by then, but we'll definitely provide updates later on. The second question was about ILUVIEN. We are making strides in using alternative access channels to address market access issues for Medicare patients. We're seeing major practices adopt this new workflow, which allows patients to access the drug benefit, similar to what we do with Cortrophin. We noticed some initial contributions to foundation funding earlier this year, but this did not significantly impact patient access to ILUVIEN; it was available briefly before closing again. Our guidance for 2026 does not plan for a meaningful return of that funding. We'll keep monitoring the situation and remain focused on enhancing the use of alternative access channels, as well as making strategic investments in marketing and medical affairs to support growing awareness of the new clinical data for DME and establish coverage for both DME and NI UPS. Additionally, we'll strengthen our commercial team and improve promotional efforts. Regarding the genetics cadence, we're maintaining a strong rhythm driven by our R&D capabilities, with 10 to 15 launches expected to support the growth of our generics business and generate cash flow that we are reinvesting into rare disease initiatives, further transforming ANI into a leading rare disease company. Thank you for your questions, Les.

And we'll take our next question from Brandon Folkes with H.C. Wainright.

Congrats on the progress. Maybe just sort of following on from the line of questioning on Cortrophin. Outside of gout, is there any way you can just give us some color in terms of how you're seeing the ACTH market shape up? Are prescribers choosing one product over the other or prescribers using both where they can? You talked about adding new prescribers. Can you just help us think through when you convert these new prescribers, are you generally converting them to sort of be a Cortrophin prescriber or an ACTH believer in prescriber? And what I'm trying to get to is how competitive is the next script for a potential patient right now versus continuing market expansion? How long do you see the market expansion playing out versus market expansion as well as share capture between the two and within the category driving growth?

Thank you for your question, Brandon. Your first question was about the ACTH market, and I want to highlight a couple of points. Firstly, we see growth across the indications we initially launched, which include rheumatology, nephrology, and neurology, along with pulmonology and ophthalmology. Looking at ANI's growth in Cortrophin for 2025, a significant part of that growth came from these specialties, in addition to gout. Gout was a contributor as well, but there's been notable growth in these other areas too. Regarding your second question about the competitive landscape, we view this situation not as a battle for market share but as an opportunity for market expansion. The addressable patient population is large and remains largely untapped. The involvement of multiple players looking to serve these patients ultimately helps drive the overall market growth and ensures patients benefit from ACTH treatment. Lastly, we are working to educate confused physicians about the appropriate patients for Cortrophin specifically, rather than the broader ACTH category. Thank you for your questions, Brandon. I would like to now turn the call back over to Nikhil Lalwani for closing remarks. Thank you, everybody, for taking time to join the ANI discussion. We look forward to updating you on our progress and are looking forward to a strong 2026. Thank you so much, and we will remain focused on our purpose of serving patients, improving lives.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.