Conference Transcript - ANIP 2026-06-03

Dennis Sting, Analyst — Jefferies

All right. Hello. Welcome to the Jefferies Healthcare Conference. My name is Dennis Sting, biotech and spec pharma analyst here at Jefferies. I have the wonderful pleasure of hosting ANI Pharmaceuticals. We have the CEO, Nikhil Lawani, here with us, as well as CFO, Stephen Carey. So welcome, guys.

Stephen Carey, CFO

Thanks, Dennis.

Dennis Sting, Analyst — Jefferies

Thank you, Dennis. Thank you for having us. Before we kind of go into Q&A, we'd love to pass it over to you to just give some opening remarks in terms of where ANI is and its, you know, current state of affairs in terms of cortrophin, the generics, and just some of the tremendous progress you guys have made over the last 12 months.

Nikhil Lalwani, CEO

Yeah. Good afternoon, and thank you, Dennis, and thank you, everybody, for joining us. ANI is building a leading rare disease company, and in 2026, we're focused on accelerating our transformation into a leading rare disease company. Our guidance for the year is $1,080,000 to $1,140,000 for revenues and $285,000,000 to $300,000,000 in adjusted non-GAAP EBITDA. Those are the numbers, but what our organization is truly driven by is our purpose of serving patients, improving lives. Rare disease accounts for approximately 60% of our revenues based on our guidance that we issued on May 8th. And we have two assets with durability and high growth, Cotrophin Gel, our lead rare disease asset, and Illuvian, which is our second rare disease asset. We also have a thriving genetics business, which has delivered very strong growth over the past few years. And along with our smaller brands business, the genetics and brands creates what we believe is a virtuous cycle of growth that generates EBITDA and cash flows that we are able to deploy into expanding the scope and scale of our rare disease business. In 2026, our number one focus, as I said, was accelerating the transformation into a leading rare disease company by maximizing the value of our current assets, both cortrophin as well as alluvian. For cortrophin, we have continued strong growth across our target indications in nephrology, neurology, pulmonology, ophthalmology, and what we've done is we've done an expansion of about a 90-person team to reach primary care and podiatrists for patients with severe acute garyarthritis flares. There's a large addressable market of patients that are underserved by other therapies for whom cortrophin gel serves as an alternate treatment option. And so as a result, we believe that there is a strong multi-year growth opportunity for cortrophin. Iluvian is an intravitreal implant that is used to treat diabetic macular edema and chronic non-infectious uveitis affecting the posterior segment of the eye. It's synergistic with cortrophin from an ophthalmology standpoint, and that's why we acquired Alamera in 2024. And like cotrophin, it also operates in both DME and NIUPS in a large addressable market that it can penetrate, and both have strong multi-year growth opportunity. They also have durability. Both drugs are tough to genericize, and we can share more about that as we go along. So that's in terms of 26 priorities. And then lastly, I would just highlight capital allocation. From a capital allocation perspective, we're investing to grow our rare disease business organically. Second, we're expanding the scope and scale by looking at M&A opportunities for rare disease. And then third is to keep the flywheel going or the virtuous cycle of growth going, we're investing a high single-digit percentage of generic sales into generics R&D to drive 10 to 15 new product launches every year and keep the generics growth going. Perfect.

Dennis Sting, Analyst — Jefferies

I mean, I have to focus on Cortrofin. It's one of the biggest growth drivers of the company. Guidance this year is 540 to 575. You guys had a good Q1, and you guys were squarely right in the middle of your own soft guidance for Q1, so that was fantastic. And then you soft guided Q2, right? and I suppose the implied guidance was around 118 to 128 for Q2, right? So there is a fairly big step up from Q1 to Q2, from 75 to that range. So I wanted to ask you, what is driving that step up? And, of course, your confidence in achieving your guidance for the full year.

Nikhil Lalwani, CEO

Sure. So I think, number one, the most important driver of Cotrofen opportunity and sales is the fundamental underlying market demand. So across our indications, lead indications or target indications, there are larger addressable markets, patient populations that we are trying to serve, and we've only really been scratching the surface, and it's highly underpenetrated. So if I take acute gouty arthritis flares as an example, there are 9.9 million patients in the U.S. that suffer from gout, but only 8 percent of them have one and a half to two flares per year and also receive an injectable treatment. So that's about 285,000 patients. That's the patient population we think is our addressable patient population, and we're scratching the surface on the number of patients served. That's true across indications. multiple sclerosis, nephrotic syndrome, sarcoidosis, across indications, we have large addressable patient populations that we are, between us and even the competitor, have very low penetration levels in. So that's the driver of demand. And that essentially continued from Q1 to Q2. As we said, in Q1, we had headwinds related to insurance re-verifications that we have worked through. We also shared that there was acceleration in February and March in new patient starts as well as new cases initiated. And then in April, we had the highest number of new patient starts as well as volumes dispensed of all time. So that momentum has continued into Q2. The other input, and so when we look at sort of big picture, the growth in Q2 versus Q1 is going to come from continued momentum in the indications that we had been targeting. While the reference point of 75 to 118 to 128 may be one way of looking at it, I would also draw your attention that Q3 and Q4, Dennis, as you know well, we did $100 million in sales in Q3 and then $110 million in Q4. So it's really sort of coming back and growing above those levels. Importantly, in Q2, we have also been able to deploy this new 64-person sales force that is taking cortrophin treatment as an alternative treatment option for patients suffering from the most severe acute gaudi arthritis flares and to primary care and podiatrists, right? We're targeting about 7,000 of these. Our recruitment and team build-out is on track. We have almost 80% of the team was recruited and trained and in the field in May. And then more, the rest will be sort of rolled out by June. And so that's, I mean, if you think about it again, we expanded our field force by 50%. When we added 64, we expanded it by 50%. And that's the inputs that will all come in the back half of the year, all to new prescribers, most of them largely naive to ACTH, almost all of them naive to ACTH. And so that's growing the market as well as will give us a significant bump in the back half of the year versus the front half of the year. And then last point I would say is maybe two more points. One is if you just look at 25, you know, as a trend in 2025 where we also did a sales force expansion in the front half, the back half accounted for about 61% of the sales. And then lastly, you know, it's a two-player market in ACTH, and both us and the competitor are looking to expand the market and grow the market. And on a combined basis, the market is expected to grow about 30 percent if you add their guidance and our guidance. Again, just to reiterate that the fundamentals of the ACTH market are intact, and that's really driven by the addressable patient populations across indications that are significantly underpenetrated. Got it.

Dennis Sting, Analyst — Jefferies

And before we kind of dig a little bit deeper into the GALT expansion, you know, when you look at IQVA, we can all see these trends. But I would argue because it's a specialty product, it's not perfectly captured, right? And that's why, you know, when you guys reported Q1, you mentioned April was the highest month of demand ever since launch. So now that we're in June, can you make any comments around, you know, around May?

Nikhil Lalwani, CEO

Yeah, so I'm not a big fan of giving quarter-to-quarter guidance, and then I'm even less fan of giving intra-quarter guidance. We reported, you know, less than a month ago in April, and I think what I can say at this point is, regarding, you know, that the momentum continues, our gout expansion, you know, you'll come to that, but our gout expansion is on track. 80% of field force is in the field through May. The early feedback is positive, right? They're reaching out to new prescriber base that, you know, largely did not know about Cotrofen and certainly didn't prescribe it. And so the early feedback is positive. What I can also say is that we've been able to recruit a very experienced and seasoned team that have access to and know this prescriber base well, right? We're targeting about 7,000 HCPs. And so as they're bringing this treatment option, it's to an experienced and seasoned sales force. And so the early momentum has continued there. And look, this gout expansion, right, for folks a little less familiar, was all driven based on the success we saw in 2025 in pilots we did. So we took 10 territories and said, hey, in those 10 territories, focus on primary care and podiatry. And they had great success. And so we shifted some of those territories and the people in those territories to this gout expansion team, and the momentum in those territories have continued. So, you know, the momentum and the target indications in pulmonology, nephrology neurology and the core indications continues and then this expansion is on track and while it's early days and i assure you we'll give you more feedback when we show up at q2 earnings the build out of the team uh has been strong and the early feedback is positive yeah okay um

Dennis Sting, Analyst — Jefferies

if iqvia data for may uh showed a decreased month over month how believable is that data If the IQVIA data showed a decrease month over month from April to May, how believable is that data?

Nikhil Lalwani, CEO

Yeah, look, I think as far as IQVIA data goes, we are hearing from multiple and we're seeing from multiple investors that there's volatility in what it's reporting, not just for our product, but also for other products. I think you've commented yourself on volatility that it's showing in other products. So to be helpful to investors, we have started, you know, we gave a Q2 guidance, and we told you about how April was going, intro quarter guidance, to talk to you about the data that we are seeing that we know we have clear control over and, you know, our internal data. And, yeah.

Dennis Sting, Analyst — Jefferies

Point is there's momentum.

Nikhil Lalwani, CEO

There is momentum, yeah.

Dennis Sting, Analyst — Jefferies

Right, because there were some re-verification issues, not necessarily issues, but more of a capacity constraint, right, given the large amount of volumes going through the channel in Q1, right? So now having, you know, I believe all that has been worked through, so going into Q2, you do have that momentum, right?

Nikhil Lalwani, CEO

That's clear, yes. The re-verifications is a topic of the past, and that has been worked through as we began Q2, yes.

Dennis Sting, Analyst — Jefferies

Okay, so then for the Gout expansion, you know, you mentioned early feedback. right maybe give a little bit more color in terms of receptivity from these PCPs and podiatrists you know how how comfortable are they in prescribing such an expensive product for a three to five day course for a flare and yeah just some sort of additional color they can get would be helpful right so I think

Nikhil Lalwani, CEO

we should start with where does control fun gel fit into the gap treatment paradigm. So cotrophin gel is not disease-modifying. It's meant for treatment of flares and to alleviate the symptoms associated with flares. And it's for patients that have the most severe acute gaudi arthritis flares. Those patients, they've tried the NSAIDs, some of the other treatments like colcicine, allopurinol, et cetera, and they're just not controlled or they have high side effects to those treatments. And it's for those, so it's a much smaller patient population for whom cortrophin gel, we believe, is appropriate as an alternative treatment option to consider. So when you come to these primary care physicians and podiatrists, what we're seeing is, and we saw in the pilots is that some of these severe acute gaudi arthritis flares patients are being treated by podiatrists and primary care physicians. And so what we tried to, what we learned from the pilots is how do you identify, because there's a large number of PCPs as well as podiatrists, how do you identify the ones that are treating the most severe acute gaudi arthritis flares patients? So we analyzed claims data and developed a list of about 7,000 HCPs that treat these patients with the most severe acute gaudi arthritis flares. And when we have been going to these offices, the initial feedback has been positive. And what we're seeing is that they have a flow of patients, right? They have a flow of patients that they're treating. And so a lot of the discussions has been around, who are the appropriate patients? Who are the patients who are not well-controlled by other therapeutics? And really, this is a late-line, last-line treatment options to help control their flares and that's the ones that they're willing to try to control fangell as a treatment option for to your point you know these offices are probably you know have lesser experience in terms of dealing with a multi-page enrollment form and the involved prior authorization process and we're giving them the support needed we have learnings from obviously from the pilots And, you know, to be clear, gout was approximately 18% of our volumes, even from other specialties, even before we did this expansion. So, you know, how to navigate the patient access and patient support sort of flow, we have learnings both from the pilots as well as also from our experience serving nephrologists and rheumatologists that also treat gout patients. So we're providing these offices the support, the extra support that's needed to be able to get patients on therapy.

Dennis Sting, Analyst — Jefferies

So some of the feedback from doctors has been that, you know, around the access aspect of Quartrofin, and not just for you guys but also for your competitors, it's just incredibly difficult. There's an immense sense of fatigue around prescribing, right? And, you know, part of your solution is, you know, you mentioned you're expanding the sales, not Salesforce, but the team by 90. 60 of them are reps, 30 are, you know, patient support services and reimbursement, things like that. But, like, how has, like, has that experience so far in the PCP podiatrist setting in terms of access, is that any different from what you've seen in rheumatology?

Nikhil Lalwani, CEO

Yeah, I think to be able to speak about the expansion, we'll probably need a bit more time. But the intent is very much there, and the learnings from the pilot are there to improve the access and the enrollment to fulfillment process. And we're making investments not just in people, but also systems and processes to improve and make it easier for the physician and officers. And that's been a commitment of ours really from day one. It's something that we've been working on even across specialties. I think the thing that's different about podiatrists and primary care offices is that they probably have a little less experience with more involved enrollment forms. Again, it's not that they've not done any, but I think that we've, and so we're working with them to, and again, we should not forget at the end of every enrollment form, at the end of every vial or pre-filled syringe is a patient, and this is a patient that gets gout flares, one and a half to two flares a year, and is severe flares that are uncontrolled. So that patient need is what drives the physician's office, the manufacturer, the insurance company, and all of us to come together to work and provide the appropriate access to the patients in need.

Dennis Sting, Analyst — Jefferies

Okay. Maybe remind me, when a patient comes into the physician's office with an acute flare, what does the treatment paradigm look like? How long does a flare even last on average? Do they step through some of these NSAIDs and steroids, and they come back again after it fails, and then you become eligible for cortrophin? How does that work exactly logistically?

Nikhil Lalwani, CEO

Sure. Yeah. I think the way it works practically is there are a pool of patients that a physician has been treating, and the physician has been trying many alternative treatments. And so when our rep comes to them for the first time, they talk about cortrophin, they talk about who are the appropriate patients to consider for cortrophin. And a lot of that discussion is anchored on who are the patients that are currently not being controlled by other therapeutics or have high side effects to steroids, right? And so those are the patients that we say, and then we talk about cortrofen and the differentiated mechanism of action, and talk about those are the patients to consider for cortrofen. So I think that's how it works from a practical standpoint. So, Cotrofen, almost all patients that take Cotrofen have stepped through, you know, multiple other therapeutics before they're trying Cotrofen for flare management.

Dennis Sting, Analyst — Jefferies

Like, does that happen within a single flare, or does the patient just have to have a history of not being responsive to NSAIDs during these flares?

Nikhil Lalwani, CEO

Yeah, typically these are patients that have had flares before and, you know, and tried other therapeutics. So the doc knows that, hey, patient A has had flares, has severe flares, and other therapeutics are not working, or they're having high side effects to those other therapeutics, and that's when they consider a coprofen IV. And so it's not within a flare. And sometimes, you know, the enrollment to fulfillment process takes a bit of time. It's not that it happens in a matter of a day. Sometimes it does, but sometimes it takes a few more days or may take weeks. So it's also we focus on being flare-ready. So maybe not for this flare but for the next flare for the patient to be ready with the therapeutic. Okay. How long does an average flare last? It varies, and it also varies from indication, right? So a multiple sclerosis flare or exacerbation may be different from an acute cardiothoritis flare. But for gout? Again, the severeness varies, but it can be days.

Dennis Sting, Analyst — Jefferies

That's super helpful. So then it seems like you mentioned you guys have targeted or have identified 7,000 HCPs as part of this expansion. Can you comment on how many acute gaudy arthritis patients that those 7,000 doctors address or have under their care?

Nikhil Lalwani, CEO

Yeah, so you mean as a subset of the 285,000 we believe are in the addressable market, right? We've not spoken to that necessarily. I think we do believe that there's a large number of patients that are being addressed because we looked at the claims data to identify and develop an algorithm them that helps us identify that these are the ones serving the most number of acute cardiothoritis flares patients. So we identify territories. They're not necessarily covering the entire country, but the territories and the physicians that essentially we believe treat a large number of patients, and that's how we identify these 7,000, and that's the ones that the 64-person sales force is going after. Is it a...

Dennis Sting, Analyst — Jefferies

Oh, sorry, detailing. Like I said, a sizable, like a big chunk of the 200-some thousand that you have?

Nikhil Lalwani, CEO

It's a meaningful input into the 285,000. Now, remember that we also have nephrologists and rheumatologists that also deal with severe acute garyarthritis flares patients, and so that is, you know, complementary to this group, right? So our expansion here is to try and reach more of those patients than the ones that we're already reaching through nephrologists and rheumatologists.

Dennis Sting, Analyst — Jefferies

Does access to quartrophin, like, is it different among the different channels, you know, meaning Medicare, commercial, or Medicaid even, or VA? I'm just curious what your experience is there.

Nikhil Lalwani, CEO

Yes, it varies by channel, but as far as a competitive category, it's largely one of two, so, you know, it's parity access for both players.

Dennis Sting, Analyst — Jefferies

Like, I guess, is it more difficult or does it take longer for a prior auth to get actually approved in each of these channels?

Nikhil Lalwani, CEO

Not necessarily. I think that they each have their utilization management and prior auth and step through, you know, criteria. So, yeah.

Dennis Sting, Analyst — Jefferies

But the point is the expansion is ongoing. You guys are very confident in the second half acceleration. that will come from this expansion, right? And when you look at consensus numbers, I don't remember them off the top of my head, but there is an optically steep ramp, but you feel fairly good about that and getting within your guidance. That's kind of the takeaway.

Nikhil Lalwani, CEO

Right, and I would, that's absolutely correct. And I think the main thing about the back half is when we, if you just again step back, we did 347 million in sales last year. When we guided to 540 to 575, we had said that the bulk of that growth would come from continued momentum with the team that we already had in place. So you'll see that ramp. We also had that same ramp in 25. So we'll see continued ramp there from the team that we already had in place. And then on top of that, we have a 50% expansion in our sales force with the addition of these 64 reps, and that is a completely new input in the back half of the year, which is not there in the front half. And so, you know, that will also drive additional sales in the back half.

Dennis Sting, Analyst — Jefferies

Yeah. Maybe talk a little bit about the, you know, like we've just been talking about 2026, but just talk a little bit about the durability of the franchise.

Nikhil Lalwani, CEO

Right. We believe that there's a strong multi-year growth runway for Cotrofen. It is a tough drug to genericize. There are, you know, obviously with us also having a generics business, We know and we've been studying what it takes to genericize this drug, and many companies have tried in the past to genericize ACTH products. The formulation is complex, and the path to genericization is tough. So there is durability. I think both players have IP that go into the early 2040s, right, in addition to the just tougher to formulate a generic and to show sameness. in addition to that you know there is this large patient population so there is a multi-year growth opportunity so yeah just both growth and durability are there with this franchise

Dennis Sting, Analyst — Jefferies

okay last question on cortrophin I promise yeah but look access is you know for cortrophin and the competitor is obviously difficult I think we all know that. That's kind of the status quo. But I'm wondering if you're thinking about IRA, right? Like when, if or when that could happen, you know, you don't have to give a specific time. But I'm just curious because if access is so difficult, if you do end up getting selected as part of the negotiations and all of a sudden you're on, like, formulary, right, does that all of a sudden open up access, right? Yes, price might take a hit, but, you know, the potential volume that could come from that could offset that price. So I'm just curious if you've thought about that. Sure.

Nikhil Lalwani, CEO

Look, IRA is an evolving landscape, and IRA has multiple components to it. There's the party redesign, there's the inflation rebate, and there's the drug price renegotiation. We already saw in 25 a modest tailwind from the benefit redesign and the inflation rebate. So we saw that, you know, while the out-of-pocket was maxed and then patients had the benefit of smoothing, that led to greater access and volume. We obviously had the inflation rebate that we had to pay as manufacturer. And so net-net was a modest tailwind. In terms of the drug price negotiation, this is an evolving landscape. and, you know, to the point you made, Dennis, that there's a balance between improved access and pricing and we believe that we continue to remain bullish and believe that Cotrofen will be a meaningful product for E&I in the future, even after the drug price negotiations and, you know, we think that that's several years away. Obviously, it's an evolving landscape. Okay, we'll continue to monitor it, and, you know, I'll be happy to update as we go along. But conceptually, does that make sense, or it's still kind of like TBD at this point? No, conceptually, you were spot on. That prices that are, sorry, drugs that are negotiated are put on formulary, and therefore the access, and for all indications, and the access improves, see? Especially when you compare it with where Cotrofen and Actar are today. it would improve significantly. Okay, thank you.

Dennis Sting, Analyst — Jefferies

Maybe in the last few minutes, I mean, you know, on Q1 you guys talked about this new, you know, licensing deal, IP licensing deal that you did with Harmony. So talk a little bit about that. How material could that be? And, you know, Harmony also has a Phase III data set in their high-dose AWACIX, you know, study next year. So that might drive incremental value in that royalty stream. So can you just talk through the rationale of that deal and what you could potentially do with that royalty stream?

Stephen Carey, CFO

Yeah, thanks for the question, Dennis. Yeah, we were quite pleased to announce this deal on the first quarter earnings call where we were able to out-license IP that our subsidiary, Navidium, had developed. It's a deal that, you know, it's a good example of how we're focused on bringing the strengths across the entire A&I platform to bear to create value for shareholders. And for Harmony, it was a way for them to add to their intellectual property estate as they manage their Patolisant franchise. In terms of financials for the deal, there was a $15 million upfront licensing fee that was recorded in the first quarter of this year. We are doing some development work on behalf of Harmony, where we expect to earn a $10 million development milestone between quarters two and three. and then we have a low single-digit royalty in their Patolisan franchise with the current product being Wacix with roughly a billion dollars of sales per annum.

Dennis Sting, Analyst — Jefferies

Okay, perfect. And then, you know, assuming the phase three data is positive, that, you know, extends the IP of that franchise, right? so presumably, you know, sales would continue to go up and then the royalty stream would go up as well.

Stephen Carey, CFO

Yeah, because the royalty stream is on all formulations of Patolisan. That's correct.

Dennis Sting, Analyst — Jefferies

Well, I think we are out of time, but thank you guys so much.