Ani Pharmaceuticals Inc (ANIP) Q1 2026 Earnings Call Transcript

Good day, everyone, and welcome to today's A&I Pharmaceuticals, Inc. first quarter 2026 earnings results call. Please note this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star one one on your telephone keypad. If you'd like to withdraw your question, please press star one one on your telephone keypad again. It is now my pleasure to to turn the conference over to Irina Koffler.

Thank you, Liz. Welcome to A&I Pharmaceuticals First Quarter 2026 Earnings Results Call. This is Irina Koffler, Investor Relations for A&I. 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 Mutt, Senior Vice President and Head of A&I's Rare Disease Business. You can also access the webcast of this call through the Investors section of the A&I 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 two. Before we begin, I would like to remind everyone that some statements we make today may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. A&I cautions that these forward-looking statements are subject to risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC that may cause actual results to 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 in 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 recorded on May 8, 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, Irina, and welcome again to ANI. Good morning, everyone, and thank you for joining us for ANI's first quarter 2026 earnings call. Starting on slide four, in the first quarter, we continue to deliver on our goal of accelerating our transformation into a leading rare disease company and meaningfully further our commitment to serving patients, improving lives. Specifically, in the first quarter, we grew total net revenues 20% year over year, driven by strong performance across our rare disease and genetic businesses, along with contributions from an innovative intellectual property out licensing agreement that will provide us with royalty revenues for years going forward. We also grew adjusted EBITDA 24% year-over-year while making strategic investments into our rare disease business to accelerate its growth. These strong first quarter results enabled us to raise our 2026 financial guidance for total revenue to the range of $1.08 billion to $1.14 billion and adjusted EBITDA to the range of $285 million to $300 million. I'm highly encouraged by our first quarter performance, which positions us well to drive meaningful growth in 2026 and beyond. Turning to slide five, this year we outlined top three priorities for 2026, and I'm proud of all of the hard work our team has put in to generate strong momentum as we execute against these priorities. The first priority is to accelerate our transformation into a leading rare disease company. Central to this effort is maximizing the multi-year growth opportunity for Cotrophin Gel, our lead rare disease asset. We delivered $75.1 million in Cotrophin Gel net revenues for the first quarter, up 42% year-over-year and consistent with the expectations we outlined during our last quarterly call. The fundamentals remain strong, and we exited the quarter with clear traction across our target indications. We saw accelerating momentum across our new patient starts and monthly volumes dispensed in February and March. This momentum has persisted in the second quarter, with April having the highest number of new patient starts and monthly volumes dispensed since launch. We have also made significant strides this quarter in expanding our rare disease organization to capture the sizable and unique opportunity in acute gaudi arthritis flares by targeting podiatry and primary care. We have recently hired and onboarded the majority of our new dedicated commercial team who will be in the field in the second quarter. We expect to have our full organizational expansion completed and operational by the end of June. This, together with the continued strong demand across other core indications provides a solid foundation to drive significant revenue growth in the back half of the year. We believe we are well positioned to achieve our 2026 guidance of $540 million to $575 million in cortofen gel revenues. For Lugin, we delivered $19.3 million of revenue in the first quarter, up 20% year over year as we continue to execute on the commercial and patient access initiatives we established in 2025. In particular, we made meaningful progress on generating and sharing clinical data with the retina community, including our recent publication of New Day results in DME. We're also on track to announce results from the Phase 4 Synchronicity clinical trial in NIUPS at a medical conference in the third quarter of 2026. Over the long term, we continue to believe the addressable patient populations in DME and NIUPS represent at least 10x the number of patients treated with Illusion today, representing a significant and durable opportunity for value creation. Turning to slide 6, we entered into a transaction with Harmony Biosciences, under which we exclusively licensed certain intellectual property to Harmony, which expands its intellectual property estate for Ptollasand. In addition, we provided Harmony a co-exclusive license with which Harmony and Nvidium, a subsidiary of ANI, intend to develop a novel formulation of Pitocent in broad CNS indications. In the first quarter, we received a $15 million upfront license fee. Additionally, we have the potential to receive an additional $10 million milestone payment upon achievement of certain development milestones and expect these development milestones to be achieved in the second and third quarters of 2026. We will also receive low single-digit royalties on Patolisan-based products. Harmony's guidance has waykicks delivering net revenues of $1 billion to $1.04 billion in 2026. Turning to slide 7, our second priority is continued execution in our generic business by leveraging our superior R&D capabilities, operational execution, and US-based manufacturing footprint, as well as maintaining our current cadence of 10 to 15 launches annually. Similar to Rare Disease, similar to our Rare Disease franchise, we are able to report meaningful progress on this front. Year-to-date, we have already launched six new generics products and continue holding our position as the number two player in overall CGT approvals. Our third priority is managing a disciplined capital allocation strategy. We continue to explore inorganic opportunities to expand the scope and scale of our rare disease business. We are also focused on driving organic growth by investing in our dedicated organization for cortrophin in acute gaudi arthritis players and investing a high single-digit percentage of generics revenues into generics R&D. Our confidence in the business is further evidenced by our new hundred million dollars share repurchase program authorized by our board turning to slide eight we are encouraged by our first quarter performance and the important progress we've made against our strategic priorities we are seeing strong momentum coming out of the quarter and are well positioned to achieve our newly raised 2026 financial guidance in 2026 we expect to deliver over a billion dollars in revenue representing 26 growth over 2025 at the midpoint of our guidance range, and rare disease is expected to account for approximately 60% of our total revenues in 2026, with cortrophin gel growing 60% year-over-year. We also expect to expand the bottom line with adjusted EBITDA forecasted to grow 27% year-over-year. Our balance sheet is healthy, with the capacity to support future business development opportunities to expand scope and scale of our rare disease business. With all of this recent progress, we are continuing our virtual cycle of growth with which our generics and brands businesses generate meaningful cash flows to support our rare disease business as we accelerate our transformation into a leading rare disease company. And now turn the call over to Chris to discuss our rare disease business in more detail.

Thank you, Nikhil, and good morning, everyone. Starting with slide 9, Cortrofin grew 42% year-over-year to $75.1 million in line with our expectations in the first quarter. We drove momentum across our underpenetrated specialty indications and made significant progress on our organizational expansion to capture the unique opportunity in acute gouty arthritis flares. As a reminder, consistent with prior years and typical industry dynamics, Cortrofin's performance in the first quarter reflected seasonality primarily related to the impact of insurance re-verifications. In the first half of the quarter, insurance re-verifications took slightly longer to clear as compared to the prior year due to increased cortrophin patient volumes in the physician offices and in some parts of the country due to weather-related physician office closures that temporarily delay the re-verification process. As physician offices worked through the re-verification backlog, cortrophin sales began to ramp back up. In fact, we saw an acceleration in February and March, which carried into April. April achieved the highest number of new patient starts and monthly volumes dispensed since launch. We are also pleased with the underlying fundamentals. We delivered year-over-year growth across all of our targeted specialties of rheumatology, nephrology, neurology, pulmonology, and ophthalmology. Prescribing for cortrophin gel and acute gaudy arthritis flares remained a key driver this quarter. This indication is unique to cortrophin gel among ACTH therapies, represented approximately 18% of total utilization. We also continue to realize meaningful revenue synergies in ophthalmology, with first quarter cortrophin volumes in ophthalmology doubling over the same period a year ago. I'm proud of our commercial team's execution this quarter that positions us for significant growth in 2026. To capture the multi-year growth potential of cortrophin gel, we continue to focus on three key strategic priorities. High ROI commercial initiatives, investment to generate robust clinical evidence to support physician decision-making and confidence in cotrophin gel, and enhancing patient convenience. I want to focus my comments today on our investments in high ROI commercial initiatives. Turning to slide 10, building on the commercial expansion we executed in 2025 and following a successful pilot program, we are taking the next step to capture the unique opportunity for cortropharyngeal and acute gaudy arthritis flares with our new 90-person dedicated organization targeting primary care and podiatry. The majority of our commercial team has been recently hired and onboarded. They will be in the field and meaningfully engaging with prescriber targets in the back half of the second quarter. Further, our sales team is equipped with new promotional materials focused on acute gaudy arthritis flares that we believe will assist significantly with our educational efforts. We expect to have the full team deployed by the end of the second quarter, focusing on the 7,000 HCPs to treat the most severe patients outside of our prior call points in rheumatology and nephrology. While we anticipate the expansion to begin impacting cortropharyngeal volumes in the second half of 2026, we expect a greater impact in 2027 as the team reaches full productivity. There are several reasons why we are confident about the opportunity in acute gouty arthritis flares. First, it represents a significantly underpenetrated market opportunity. There are roughly 10 million patients in the U.S. with gout. About 36% receive treatment annually. They have 1.5 to 2 flares on average per year, and only 8% of those patients receive an injectable flare treatment. This group of 285,000 patients represents our addressable patient population, and a majority of them are treated in settings called on by our new team. Second, cortrophin is the only approved ACTH therapy for acute gaudiarthritis flares. Third, we have a proven track record in this indication. Prescribing for acute gaudiarthritis flares represents approximately 18% of cortrophin gel use, to date driven primarily by use in rheumatology and nephrology. Last year, we ran successful pilots across 10 territories in primary care and podiatry, and we continue to see momentum in these territories. This data gave us further confidence to expand our organization to capture the broader opportunity in gout. Finally, our organization buildup further enables us to continue expanding the ACTH market, which is pictured on slide 11. Already, prescribers who were previously naïve to ACTH represent approximately half of our total cortrophin gel prescriber base, and this cohort will continue to grow. The ACTH market is expected to reach over $1.3 billion in sales in 2026, with cortrophin and expected to grow 55% to 65% year over year. On slide 12, turning to our retina franchise, we're advancing several initiatives to support Illuvian sales. We're committed to generating clinical data for the overall retina community. We're pleased that last month, the results of our New Day study of Illuvian in patients with DME were published in Ophthalmology, a leading globally respected peer-reviewed journal. We also expect to share results from our Synchronicity Phase 4 study of UT, now promoted under the Illuvian label, and chronic NIUPS at a medical meeting in the third quarter. In addition, our commercial teams focus on educating and engaging the retina community, and they're conducting peer-to-peer educational programs and field activities with updated marketing materials to enhance physician understanding of Illuvian and its two indications. We also continue to work with physician practices as they navigate ongoing Medicare market access challenges that have persisted since January 2025, including exploring alternate access pathways. I'm proud of all of the progress our team made this quarter and believe we are well positioned to accelerate our transformation into a leading rare disease company. With that, I will now turn the call over to Steve to detail our financials.

Thanks, Chris, and good morning to everyone on the call. I'll now review our first quarter results and 2026 guidance in more detail. Starting with slide 13, A&I total net revenues were $237.5 million in the first quarter, up 20% over the prior year period. Revenues from Cortrofingel in the first quarter were $75.1 million, up 42% from the prior year period, performing in line with our expectations. As Chris noted, first quarter 2026 results were impacted by seasonality related to the impact of insurance reverifications that took slightly longer to clear in January and February. Alluvian net revenues were $19.3 million in the first quarter, up 20% from the prior year period. As Nikhil mentioned, in January, we entered into a licensing transaction with Harmony Biosciences. We recognized $21.5 million of associated revenues in the first quarter, consisting of the $15 million upfront license fee and the initial royalty income on sales of Wacix. Revenues from generics in the first quarter were $105.4 million, an increase of 7% over the prior year, driven by the continued strength in the partner generic launch that commenced in the third quarter of 2025, contribution from new product launches, and commercial and operational outperformance. Turning to slide 14, non-GAAP cost of sales increased 28% to $93.1 million in the first quarter of 2026 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 first quarter was 60.8% a decrease of approximately 230 basis points from the prior year period principally due to higher sales of royalty-bearing products including cortrophin gel the partner generic product launch that occurred in the third quarter of 2025 the non recurrence of prior year revenues from through Calipride as well as lower brand sales year-over-year. These effects were somewhat tempered by the initial revenue recognition under the Harmony Agreement. Non-GAAP research and development expenses were $10 million in the first quarter, essentially flat with the prior year period. Non-GAAP selling, general, and administrative expenses increased 12% to $71.4 million in the first quarter, driven by initial marketing and recruitment expenses for our organizational expansion for Kortrofen in acute Gaudi arthritis flares, as well as an overall increase in activities to support the ongoing significant growth of our business. Adjusted non-GAAP diluted earnings per share was $2.05 for the first quarter compared to $1.70 per share in the prior year period. Adjusted non-GAAP EBITDA for the first quarter was $63 million, up 24% compared to the prior year period. We ended the first quarter with $311.2 million in unrestricted cash, up $25.6 million as compared to $285.6 million as of the December 31st, 2025 balance sheet. Cash flow from operations was $58.4 million in the first quarter. As of March 31st, 2026, we had $625 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the first quarter, our gross leverage was 2.6 times and our net leverage was 1.3 times our trailing 12 months adjusted non-GAAP EBITDA of $242 million. Driven by first quarter performance, we are pleased to raise our 2026 financial guidance for total net revenue, adjusted non-GAAP EBITDA, and adjusted non-GAAP EPS, which reflects significant top and bottom line growth. Our guidance, outlined on slide 15, is as follows. We now expect 2026 net revenue of $1.08 to $1.14 billion, up $25 million from previous guidance. We are reaffirming our guidance for cortrophin gel net revenue of $540 million to $575 million. And from a quarterly cadence perspective, we expect second quarter cortrophin gel revenues to represent approximately 21% to 23% of total 2026 cortrophin revenues. 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 of our commercial organization focused on acute Gaudi arthritis flares. Revenues associated with this expansion will first occur late in the second quarter and are expected to build momentum throughout the second half of the year. We are reaffirming our alluvian net revenue guidance of $78 million to $83 million. And we now expect non-GAAP adjusted EBITDA of $285 million to $300 million, up $10 million from our previous guidance. From a quarterly cadence perspective, we expect second quarter non-GAAP EBITDA to be essentially in line with first quarter, as the increase in cortrophin gel revenues will be tempered by the non-recurrence of the $15 million upfront license fee recognized in the first quarter. We then expect strong sequential growth in adjusted non-GAAP EBITDA in the third and fourth quarters driven by cortrophin gel revenue gains. We now expect adjusted non-GAAP earnings per share between $9.19 and $9.69. We are also adjusting upward gross margin expectations and expect adjusted gross margin to be 59.9% to 60.9% in 2026, up 60 BIPs from our previous guidance. We continue to anticipate between 21.5 million and 21.8 million shares outstanding for the purpose of calculating full-year non-GAAP diluted EPS and a full-year U.S. GAAP effective tax rate of approximately 26 percent to 28 percent. Finally, we are pleased to announce a new three-year share repurchase program to repurchase up to $100 million in common stock. This reflects the strength of our balance sheet and our ongoing confidence in the business. This program provides us with another tool in our capital allocation strategy, which is centered on creating long-term value for our shareholders. With that, I'll turn the call back to Nikhil.

Thank you, Steve. Turning to slide 16, in closing, we are making meaningful progress against our strategic priorities to accelerate our transformation into a leading rare disease company, continuing to execute in generics and deploying capital in a disciplined matter. Overall, we expect to deliver over a billion dollars in revenue in 26 with rare disease approximate representing approximately 60 percent of total revenues we are on track to achieve our raised 2026 financial guidance which reflects significant top and bottom line growth operator please open up the line for questions as a reminder if you'd like to ask a question at this time please press star one one on your telephone and wait for your name to be announced.

To withdraw your question, please press star one one again. Our first question comes from David Amsalem with Piper Sandler.

Thanks. So just have a couple. First on the mix for Cortrofin, can you talk to how much of your growth is coming from the non-gout settings like pulmonology slash sarcoidosis and ophthalmology and how much of the mix is in those other high growth settings other than gout. So that's number one. And then also wanted to drill down on number of vials and duration of treatment in the various indications. My understanding is that in gout, it's a pretty short course, pulmonology, ophthalmology, others. There's more vials. There's more duration. So help us better understand those dynamics. And then last question is on payer access. As you gain more and more of a footprint overall, and particularly in gout, can you talk about how access dynamics might evolve? Thank you.

Yeah. Good morning and thank you, David. So your first question is where is the growth coming from? Our previous year sales was $348 million and our guidance for this year is $540 to $575 million. So that growth of approximately 60%, majority of that growth comes from the what I would refer to as core indications are the ones that we had been, you know, focusing on since launch, which is rheumatology, nephrology, neurology, pulmonology, and ophthalmology. And there is acute gouty arthritis flares as part of that, but coming from the prescribers being rheumatologists and nephrologists. Now, when you think about, you know, the gout expansion, that we've done this year, as Chris mentioned in his remarks, the team is pretty much hired and trained and is, you know, going to be in the field starting the back half of this quarter. So you'll see some revenue impact in this quarter, but it'll really ramp up towards Q3, Q4. But the majority of, but there's a much greater impact that's going to happen in 2027 from this expansion that we've done of, you know, a dedicated commercial organization for acute DRE arthritis flares targeting primary care and podiatry. So to summarize again, majority of that growth from 347 going to 540 to 575 will come from our core indications and with our prescribers with those core indications. And then there's a subset of The growth is coming from the gout expansion that we're doing this year. We'll see the full-scale impact and operating leverage in 27. So that's the answer to question one. Regarding the vials by different therapeutic areas and indications, you're absolutely right, that there is a variance. You know, corprofen is prescribed by—across specialties, and there is specialties like pulmonology and nephrology that have higher vials or PFS per patient, and then there is multiple sclerosis, gout, which have, you know, lower vials per flare. And I would just remind that, you know, in some cases, the patients do come back and, you know, they will may have used Cortrofen a couple of years ago, but then will come back the next time, you know, an exacerbation or a flare comes up. So, that's a bit of the color that we can give you on vials or duration across indications. And obviously, there's a continuum there across different specialties and different indications. And then on third is payer access. You know, we brought competition to a category that had no competition in ACTH when we launched in 2022 and have been focused on expanding access and, you know, serving the significantly under-penetrated addressable market across indications. And what you'll see, you know, with the 30% growth implied in our and our competitors' guidance is that, you know, we're both focused on, you know, reaching the patients that can, for who ACTH therapy is appropriate and, you know, expanding the access as we as we are doing that you know i'm trying to keep it a bit general because as you would expect uh you know there's stuff that is competitively sensitive uh that no uh that we need to just balance while sharing information that's helpful for investors so thank you david our next question comes from the mill divan with gogenheim partners great thanks uh

thanks for all the information today and thanks for taking my question so i guess there are a couple of questions related to the guidance increase. So, and I guess ties into the Harmony deal. So, just to confirm, it sounds like you already recognize $15 million upfront license fee. So, I'm assuming that's already included in your guidance expectations. And then there's this $10 million in development models, some of the you're expecting in 2Q and 3Q. So, my question is, is that already included in your guidance as well? If it is, then that sort of counts for the $25 million guidance range for the company as a whole, so I'm wondering how you're thinking about the royalties that you'd get on top of that. Is that including your guidance or not? Because if that is, then I'd almost wonder why that guidance, especially the EBITDA guidance, maybe not going up by more given the impact of this acquisition. And then my second question, or sorry, I'll put a long question. The second one is on Cortropin, and I understand the reauthorization took longer than I expected in the first half of the first quarter, but the prescription data that we're seeing publicly through IQPN, you know, those sources still looked very, very strong. So, I'm just wondering if you can maybe help explain the disconnect there, because I would think that if the reauthorization would take longer, it would lead through to, in terms of the prescription data, but maybe it doesn't, and maybe I'm wrong on that. So, if you can just clarify how we should think about interpreting any of the publicly available prescription data.

Sure. So, good morning and thank you, Vamo. So, I'll take your second on Cotrofen and IQVIA first and then I'll come back to the guidance. So, look, in the past IQVIA has been directionally in line with our performance. However, we can't comment on the recent disconnect as it is third party data and we do not have insight into all their inputs. And that's why what we've tried to do is share internal metrics that are that are useful for investors right so we we and as you would expect operationally we remain focused on our internal metrics and leading indicators we use to manage the business while obviously watching the external metrics too and what we have shared right is that we exited the quarter and began Q2 with significant momentum across our target indications we saw accelerating momentum across monthly volumes dispensed and new patient starts in February and March, and we've spoken to some of that when we reported it in February, and then this momentum has persisted in the second quarter with April having the highest number of new patient starts and monthly volumes dispensed since launch. So, that's the answer on Cotrofen and related to the IQVIL clarification that you had sought. And then on the guidance, look, we, you know, our guidance included, when we had issued the guidance, it included the Harmony deal, right? So our initial guidance, which we issued in January, included Cotrofen at 540 to 575 million, Illuvian at 78 to 83, Revenues from the out-licensing agreement, gross margin at 59.3 to 60.3, and adjusted EBITDA at 275 to 290. Our newly raised 26 guidance retains Cotrophin and Elluvian revenue guidance. And so for the guidance increase is really driven by high genetics revenues on the back of first quarter and visibility into new product launches for the rest of the year. That's one. Second is clarity around the milestone achievement of the $10 million. The development milestones that is there in the Harmony agreement, we have more clarity around when that can be achieved, and I think Steve had spoken that that will be achieved in the second and third quarter, that $10 million will be achieved across the second and third quarter of this year. And third is just refinement of the royalties, revenues expected for this year based on the updated 2026 guidance issued by Harmony. Thank you for your question, Vamo.

Our next question comes from Dennis Ding with Jeffries.

Hey, guys. Thanks for taking my questions, and congrats on a very good Q1. So, you know, on the Q2 soft guidance, it seems to imply $117 to $128 million for criptropin at the midpoint. Maybe talk about the pushes and pulls on that number and what's driving your confidence today in achieving that, and how much visibility do you have on orders over the next 45 days? That's question one. And then question number two, you know, if I think about petroleum guidance for the year, I feel like what I'm really trying to get comfortable with is maybe around an incremental $50 million in second half gout revenue. When I do the math, that implies around, let's say, 1,500 to 2,000 flares that need to be treated in the second half, but you're also going after 7,000 HCPs, so maybe only a small proportion that just needs to treat a single flare in the second half to bridge the $50 million in gout revenue. Do you agree with that, Matt, or is there something that we're missing here?

So, and good morning, and thank you for your questions, Dennis. So, the first question is on the clotrophin guidance and the quarterly evolution that we spoke to, so look, you know, as we said, we saw we exited the first quarter with significant momentum, right, and saw accelerating momentum across monthly volumes dispensed and new patient starts in February and March. We exited and then began in Q2 with significant momentum. We shared that, you know, both in terms of volume suspense and new patient starts, April is the highest of all time, right? We believe that momentum will sustain, right? And so we are reaffirming our guidance for cortofen of 540 to 575. And then what you have in the third and fourth quarters, is, and this goes back to the first question that I answered for David, is that the third and fourth quarters will have continued performance of our portfolio pulmonology and ophthalmology teams. And in addition to that is a full deployment of our commercial organization, right? So we have completed that hiring and training, right, for the most part. It will be fully complete by the end of June, right? But the rest of the revenues associated with this expansion will first occur late in the second quarter, and then are expected to build momentum through the second half of the year, which is in the third quarter and fourth quarter. I mean, you know, for reference, we're adding 64 new sales reps. And, you know, as you're thinking about, you know, number of patients and number of enrollments, number of physicians, I think a broader, I would just zoom out a little bit and say, you know, there are 285,000 patients that we believe are in the addressable market, and we believe that they have an unmet need where cortrophin gel may be an appropriate treatment. And they are being treated by physicians that we are currently not reaching. So consistent with our mission of serving patients, improving lives we've done an investment to to reach these patients first of all and it's a and you know as a consequence also expand the ACTH market because we're reaching a completely new set of prescribers that for the most part other than those 10 pilots that we had done last year and have seen significant success in and continue to see momentum in this year you know we're not we were not really accessing. And so really, this is about reaching that much larger patient population through the expanded sales force. And again, we remain confident with the addition of 64 reps, right, of seeing momentum build for that in the back half of the year, but also the bulk of the growth from, you know, 347 to 540 to 575 coming from the portfolio, pulmonology, and ophthalmology team. And when I say portfolio, I mean reps that detail into nephrology, neurology, and rheumatology. Thank you, Dennis.

Our next question comes from Glenn Santangelo with Barclays.

Yeah, thanks for taking my question. Hey, Nikhil, I just want to follow up on sort of your previous response regarding the guidance. I mean, you're making the case that the the licensing fee was included in the original guidance but it was unclear to me what you were saying about the milestone payments were they in the original guidance or is that incremental now i just want to make sure i'm clear on that and then i had a follow-up yeah i think that when we gave the initial guidance uh we had you know we take into account you know uh It took us time to figure out, you know, the timing for the development of these, sorry, for the achievement of the milestone related to the development.

So that's, you know, that we baked that into the revised guidance. And look, there are multiple factors that are impacting the raised guidance, as I spoke about, right, you know, earlier, right? So that was the higher generics revenues on the back of first quarter and visibility into new product launches for the rest of the year. The second is the clarity around the achievement of the $10 million development milestones. And look, we're also retaining some flexibility to invest further across rare disease and generics as we ramp through the year, right? Because we have tremendous growth opportunities across both, right? So we're retaining some flexibility to invest further in the latter part of the year. uh, you know, uh, as needed. So, and then, uh, so thank you, Glenn. And I think you have a follow-up. Please go ahead.

Yeah. And maybe, maybe I'll shift gears and ask you a quick question on the Louvian, you know, based on, you know, your full year guidance and what you sort of did on one cue, it doesn't seem to be that you're expecting any sort of sequential growth in this product throughout the year. And I was wondering if you could just update us on your sort of commercial and patient access initiatives? Because it seems like, you know, you're just sort of expecting 20 mil a quarter for the balance of the year.

Yeah, so thank you for your question, Glenn. We have, you know, we've deployed these commercial and patient access initiatives, you know, starting towards the end of 25 and heading into 26. And we're seeing the impact from those as we, you know, as we, in a strong Q1, and, you know, we're just calibrating, right, as we look ahead. The foundation-related access issues have not resolved. You know, we've obviously made some progress with alternate access pathways for patients that are, that do have the pharmacy benefit. But, you know, we're just, you know, we're calibrating as we give guidance on what will come towards the rest of the year. We have a lot to look forward to, right? We spoke about the release of the New Day clinical study results in publishing of that in ophthalmology, as well as, you know, in Q3 at a medical conference, releasing data on Illusion in NIUPS. The study is called synchronicity. And so there's a number of things that we are working on, initiatives that we're working on, but we're just being calibrated on where the guidance is versus where we started. Thanks, Glenn. Okay, thanks.

Our next question comes from Janarina Niaskova with JP Morgan.

Thank you so much.

I just wanted to talk about the data generation strategy. do you think that it makes sense generating additional data in some of the older indications as a kind of way to, you know, increase adoption? And if so, what indications do you think would be the most interesting there?

And then second question is just on BD, just, you know, latest thinking in terms of appetite or priorities for the company. Thank you.

Good morning, and thank you, Katrina. So in terms of generating scientific and clinical evidence, it's something that we've been focused on right from your one of the launch we've invested in generating preclinical evidence, you know, that shows the differentiated mechanism of action of cortrophin gel and, you know, supports the physician use of cortrophin. And we're continuing to explore, you know, and work collaboratively with physicians to identify areas where we can do that. You obviously know about the phase four study that we have in acute gaudi arthritis flares. We're looking at, and we've also got other, you know, publications we've done in the other indications. And we continue to sort of evaluate and make investments in generating scientific and clinical evidence. And, you know, we'll keep you updated. Obviously, there's a competitive angle to this in balancing what we're sharing from a competitively sensitive standpoint. But it is an area, you know, generating scientific and clinical evidence is an area we're absolutely committed to for corprofen and supporting the growth of this franchise. And then when it comes to BD, you know, we remain—it is a critical and important part of our capital allocation strategy. We are exploring ways to expand scope and scale of our rare disease business, looking at commercial assets that can leverage either the sales team that we have that go into multiple call points or the rest of the rare disease infrastructure that we have that support market access, specialty pharmacy distribution, patient support, medical affairs, marketing, all of that rare disease infrastructure that we have in place that can support us reaching patients in rare indications. So, identifying a commercial asset that can, you know, leverage these capabilities that ANI has in rare disease to expand our scope and scale, we retain our focus on that and is a critical priority for ANI. Thank you. Thank you.

Our next question comes from Les Sileski with Truist.

Good morning. Thank you for thinking of my questions. I have three. First, on the revivifications, can you color if you expect any spillover of these lingering into 2Q or is it now mostly resolved? And are you aware of the magnitude of these issues among your competitor? And how should we expect some of the reoccurrence in Q1 of next year? And then just to clear up on the Harmony settlement, is the royalty tied to all weight kick sales or just future indications or future formulations? And do you have ability to sell this royalty stream, and would you consider going this route? And then just on the buybacks, is there an ASR component to the buybacks, and how should we think about priority of capital allocation strategy?

Yeah, so thank you, Les, and good morning. I'll take the first one, and then I'll hand it over to Steve to answer the one on the share repurchase as well as the Harmony royalties. So the headwinds that we saw are related to Q1 seasonality and insurance re-verifications taking longer to get through the impact of the first half of the quarter. Physician offices have since worked through that backlog, and we saw the accelerating momentum across monthly volumes dispense and new patient starts in February and March. I think that as we head into your question on, you know, what will happen in 27Q1, as we get towards the end of the year and into 27 Q1, we will work with the physician offices, and we already have as we've been working through these insurance re-verifications on, you know, what can we do to collaborate to make these go, you know, go smoother and have identified a set of initiatives that we will deploy, and we will look forward to updating you as we get closer to that timeframe. Obviously, there was, you know, there was some impact from the weather-related issues that happened in significant number or significant weather-related issues in those first, you know, half of Q1. You know, that's something obviously that we, that's mother nature and that will decide. But, you know, in terms of the insurance re-verification process, we do have ideas that we're exploring and will implement as we get towards the end of this year and heading into next year to support the physician offices. And then I'll just turn it over to Steve to answer your question on Harmony Royalties as well as the buyback.

Yeah, so I'll pick the buy-up one first. And Les, good morning. Thanks for the questions. Just to position the repurchase program uh a little bit and then i'll get to your specific question you know as we said on the call putting this in place at this time you know reflects our confidence in the balance sheet uh you know the cash generation that you know we've achieved today with you know 311 million on the the current balance sheet um but you know our overall confidence in the future prospects of the business, which includes, you know, an expectation for significant cash flow generation in 2026. To be clear, our principal goal for the excess cash on our balance sheet remains to support future business development and M&A. And within that framework, you know, the addition of the buyback program really just gives us another tool in our tool belt as we actively manage the capital allocation plans going forward. Our shareholders should expect us to judiciously allocate cash between investment behind the strategic growth and diversification of the business, de-levering our balance sheet and return of any excess capital to shareholders. And to your specific question, Les, at the current time, there is no plan for an ASR to be implemented within this buyback program. Thank you. Oh, and then, sorry, on your...

On Harmony.

Yeah, so on the Harmony royalties, It is, the royalty is due on all Patolisan products, including Wacix and any future products that may be introduced that is Patolisan based. You know, and in terms of, you know, whether we would sell that royalty stream or not, you know, we typically don't discuss any potential future BD. We're at the moment, you know, we're just very pleased with the collaboration with Harmony and look forward to, you know, executing our portion of that out licensing deal.

Our next question comes from Brandon Fulks with HC Wainwright.

Hi, thanks for taking the questions and congrats on a very good quarter. I just want to follow up on an earlier question regarding the description growth we're seeing where we sit versus reported revenue on Cortropin. A few sub-questions here. As the ACTH category grows, are you seeing any additional payer management across the board? And then on Courtropin, again, any changes in rebates or contract terms for 2026 versus 2025? And then lastly, I guess, was the level of patient support you provided in 1Q2026, was that within what you would expect for a first quarter? Is it comparable to the prior year? And are you seeing any change in usage patterns in GAT? A lot in there, but I appreciate it.

Yeah. Good morning, Brandon, and thank you for your question. So, your first question on peer management and then your subsequent question on rebates. We try to provide as much information as we can to be useful to investors, but some stuff is competitively sensitive. And what's happening on the peer landscape as well as on rebates is competitively sensitive, so we'll not be able to give you specifics there. What I can say is that our efforts to, since we've launched, is to bring competition to a category that has not had competition and to reach more patients, right? Over half our prescribers are, you know, are ones that had, were naive to ACTH and had never considered ACTH before writing the first prescription of cortofen gel. So we're really trying to reach that larger addressable market, and we believe that with our efforts and also the competitors' efforts, there are more patients that are appropriate for ACTH that are getting access to this therapy, right? So I think that's what I could say in terms of expanding access and having patients access this therapy. So that's on your first two questions. And then with regards to patient support, no, the patient support in 2026 Q4, sorry, in 2025 Q4 and heading into 2026 Q1 was much more than the patient support that we had in 2024 Q4 going into 2025 Q1, because we obviously knew there were a lot more patients on therapy, you know, in 2025 Q4, and that would need insurance re-verifications. I believe that's where you were trying to understand. And so we made the expansion of our patient support team. But there are three different, you know, stakeholders that play a role in insurance re-verifications, and one of which is the physician offices. So I think that's, you know, across the three where we had, you know, the volumes that went to some of those physician offices, and then it was exacerbated by the weather-related delays is what really led to the insurance reverification issues. And then on gout, I think what I could share that would be useful is, you know, gout is Acute Cardioarthritis Flares, as a percentage of Cotrophin volumes, is grown to 18%, the majority of which comes from Rheumatology and Nephrology, because that's what we were originally focused on. So that, obviously, is seeing a lot of momentum. And then the cities in which we did the Pyres, those territories are also seeing momentum, And that momentum has persisted even after, you know, the pilot system included. And obviously, some of the pilots have just, you know, translated into this new acute cardiomy arthritis expansion team. And we're continuing to see momentum in that team, too. Thank you, Brandon.

Thank you very much.

Our next question comes from Thomas Smith with Learink Partners.

Hey, guys. Thanks for the updates and for taking our questions. On Court Trophin, could you just expand on some of those comments, Nikhil, with respect to the 10 primary care and podiatry centers where you executed the pilot programs last year? Is there a way to quantify, I guess, the potential continued growth and maybe the uptake from those centers now that you're a bit removed from the pilot? And what other learnings could you apply from that experience? And then on the Harmony licensing transaction, you just talk about what a potential development path looks like for the novel formulation of patolescent. Maybe a little bit of color on timelines, how you think about potential value generation from that asset. And then are there other monetizable IP assets in that portfolio that could drive maybe similar transactions here over the next couple of years? Thanks so much.

Great. And thank you, Tom, for your questions and good morning. So, on the pilots, you know, we're continuing to see momentum, you know, in both in new patient starts and volume's dispense, and the momentum is significant, right? And obviously, we keep monitoring that and that continues to give us confidence in this expansion that we've done. And a lot of that, a lot of our expansion is architected based on what we learned from the pilots, right? So, you know, when you think about, you know, which are the, how do you identify primary care and podiatrist physicians to reach out to, to reach? So, you know, we took, we looked at the success in these pilots and were able to develop a set of criteria from claims data that helped us identify who are the physicians, primary care and podiatrists, which are very large populations, and then really focusing on the, you know, the 7,000 HCPs that we are, you know, that are treating the patients with the most severe acute gaudi arthritis flare indications. And so, you know, a lot of that has been learning from there. Second is, you know, what is the cadence, right? This is a different prescriber group than, you know, than the ones that we've been going with initially or going to initially with our sales force. And so really learning like, hey, what's the cadence that would be appropriate for them? What is the messaging that's appropriate? We have a whole slew of new marketing material that is tailored to acute gouty arthritis flares and what are the messages that resonate? So a whole bunch of the architecture of our gout expansion really comes from the, you know, from the learnings from the 10 pilots. Your second question on the, you know, development timelines for Harmony, that's, you know, it's confidential to the collaboration and not one that I can speak to today. And then the last one on monetizable IP, you know, We absolutely keep working on IP that we can monetize and collaborations that we can do from a development standpoint to create value for our shareholders, and Harmony is one step in that direction. And that's also part of the reason why, as Steve has highlighted, we now, you know, have these captured in a separate line under rare disease and brands. Thank you, Thomas.

Thank you. That concludes today's question and answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.