Conference Transcript - ANIP 2026-09-15

Brandon Foulkes, Analyst — HC Wainwright & Co.

All right. Good afternoon, everyone, and thank you very much for joining us at the HCW Global Investment Conference. My name is Brandon Foulkes. I am one of the equity research analysts here at HC Wainwright. Next up, we have a fireside discussion with ANI Pharmaceuticals, and joining me from ANI is CEO Nikhil Lawani and CFO Stephen Carey. Thank you to both of you. Thank you, Brandon.

Nikhil Lalwani, CEO

Nikhil, maybe just to start off, for investors new to the story, can you just give a overview of ani today sure uh good afternoon everybody and thank you for uh being here and joining us so ani is a fast-growing profitable biopharmaceutical company where we are accelerating our transformation into a leading rare disease company our rare disease business is approaching approximately 60 of our sales in 2026. We have two acids with durability and growth. Our lead acid, purified coprofen gel, is approved across multiple indications, 20 plus, of which we focus on six or seven. It's a tough drug to genericize, and we have IP that goes into 2043. And most importantly, we have a significant unmet medical need, which a large addressable patient population that we're just scratching the surface on. in terms of addressing. And similarly, Illuvian is an intravitreal implant that is made of flucinol and acetonell. It's indicated for diabetic macular edema and chronic non-infectious uveitis affecting posterior segment of the eye. It also operates in large addressable markets and has a multi-year growth opportunity. And there are significant barriers to genericization. So both our rare disease assets have significant growth and durability. We also have a generics business, which is high performing. It has been delivering strong growth over the past four to five years. It's on the back of strong R&D capability, operational excellence. We have three manufacturing facilities in the U.S. We have 95% of our sales coming from products that are manufactured in the U.S., and we're able to invest about 10% of sales into our generics business through R&D and deliver 10 to 15 new launches that drives the success of our generics business. so overall we have a strong high-performing business with two platforms our strong rare disease business which is where our focus is for capital allocation and then our foundational generics business that generates ebitda and cash flows that drives that we can reinvest into rare disease fantastic and you know i do want to start on your lead asset culture open joe

Brandon Foulkes, Analyst — HC Wainwright & Co.

So beyond just quarterly cadence, right, what is ultimately going to determine the size of the cortrophin franchise over the next three to five years?

Nikhil Lalwani, CEO

Sure. Great question. I think first, just to explain what cortrophin is, it's a naturally derived product, drug that is made from the pituitary glands of porcines. It's used in several autoimmune indications. It is shown to bind with, on an in vitro basis, with all five cell-to-surface proteins called melanocortin receptors, and so has a non-steroidal pathway. It was believed to have a non-steroidal pathway of action. It's used for alleviation of symptoms related to exacerbations that patients have with multiple autoimmune indications, such as multiple sclerosis, rheumatoid arthritis, nephrotic syndrome, and many more autoimmune indications. What we find is when you look at the addressable market, it's a late-line therapy for use in these diseases where disease-modifying therapies have not worked and that the appropriate patients are patients that have a high side effect profile to steroids or are refractory on steroids. So it's really a late-line treatment. We believe the addressable market across indications is approximately a million patients, and we're scratching the surface between us and the competitor in terms of the number of patients that are being served with ACTH therapy. As an example of what we mean by addressable market, if you take acute guardia arthritis flares, there are 10 million patients roughly that have acute guardia arthritis flares. Many of them have flares that resolve on their own, and then there's a number of them that take, you know, more oral treatments such as prednisone, colcicine, etc., and have their flares resolved. There's a small subset of patients that have those flares are that bad that they need injectable treatments to have the flares resolved. And that 285,000 is what we consider as our addressable market. So not the 10 million, but 285,000. And if you replicate this analysis across our leading indications, then that number adds up to about a million patients. going back to your question which is beyond the quarterly cadence right what is really the driver of growth in this market is really the unmet need of these million patients uh that the addressable market and us our ability to reach these patients uh and service them and serve them fantastic and if we focus just on 2026 alone right you did revise guidance so can you just walk us through the expectations that changed and then the expectations for the back half of the year sure so when we started the year our initial guidance was on 540 million to 575 million in q1 we had a headwind with insurance re-verifications where there was a large number of patients that needed insurance re-verification and because that was exacerbated further by weather-related delays. And so as a result, our Q1 performance at $75 million was short of our initial expectations when we gave the guidance. Having said that, we delivered 53% quarter-on-quarter growth and delivered $117 million in Q2. And when we looked at our Q2 earnings, when you add the Q1 and Q2, about $192 million, and we looked at what's coming in the back half, essentially, we found that we could basically get to where we had thought the back half would be when we give the initial guidance, but not in excess of that to make up for what we fell short of in the first half. And so that's why we adjusted the guidance down 5% from 540 to 575 to 520 to 540 million.

Brandon Foulkes, Analyst — HC Wainwright & Co.

Fantastic. And that revised guidance, obviously, there's still tremendous growth in the back half of the year, especially in the fourth quarter.

Nikhil Lalwani, CEO

Can you just talk about the visibility you have today into some of those tailwinds that are going to drive that growth in the back of the year but in particular that fourth quarter sort of bump up sure so uh if i if for uh if i think of cotrophin right then you divide cotrophin into existing specialties and then the gout expansion right so we had about 120 reps right walking in to 2026 and they covered our existing specialties which is rheumatology nephrology neurology ophthalmology pulmonology and when you look at you know what we did in the first half we did 192 million which was largely from this group versus 132 million in the first half of 25 and that's you know uh 45 growth that momentum from the existing specialties will continue in the back half so when you think of With Q4, the first input is that in Q3 and Q4, the 117 will grow in the back half, quarter on quarter, right? And that's all largely from existing specialties. And then we did a 50% expansion of our sales force by adding 16 new reps for acute guardia arthritis flares, but focused on primary care and podiatry on the back of successful pilots and on the back of success that we had seen with nephrologists and rheumatologists. So, you know, gout was already 18% of our volume. And then we had the success in the pilots and we did this expansion. And that expansion, you know, we've seen very strong indicators of demand. All of our reps that were brought on board in May and June are, you know, have two or more cases. A third of our prescribers that keep growing have two or more cases initiated. We have growth across both primary care and podiatry, and we're seeing momentum across regions. We're also starting to see refills already, right, which are largely in line with what we had expected it to be and what we had seen in the pilot. So all of this gives us confidence that when we get to Q3 and Q4, or we are in Q3, we're seeing this momentum continue in Q3, and when we get to Q4, you're going to have reps that have basically all been in the building for between three and six months. So the productivity increase will be significant there and also the conversion to new patient starts and volumes. So that will be a second sort of tailwind into the Q3 and Q4 performance. And so when you look at Q4, which is where your final question was, you have the momentum from the existing specialties, which already showed 45% growth in the first half, that momentum continuing. you have the impact from the 60 new reps right that impact getting amplified in q4 when they've had three to six months under the belt and then third is your typical q4 dynamics where you know there's a higher volume prescribed because prescribers are trying to get patients on extra drug or getting patients drug before their insurance resets uh as well as channel dynamics that are typical for any company uh going into q4 that's what gives us confidence on the back half expansion.

Brandon Foulkes, Analyst — HC Wainwright & Co.

And just drilling down a little bit more on that acute gouty arthritis expansion, as you mentioned, very encouraging early metrics, right? But what will tell you that that launch has progressed from initial, successful initial adoption to sustainable physician utilization and part of their practice? Is it those refills you mentioned or other metrics as well?

Nikhil Lalwani, CEO

So first off, you know, we are already seeing the momentum continue in the 10 territories that we had done pilots in where we now are seeing that impact continue right across those pilot territories and and so what are those metrics and i think there there are two levels one is continued demand generation right which is basically prescribers using it using it for more patients uh that they believe are appropriate for for therapy and it being used across primary care and podiatry and you're seeing both depth and breadth of prescriptions and patients initiation obviously that also translates to salesforce performance you know if you think of the the big shift between last year and this year what we saw in 10 territories we've been able to scale up to 60 right so we've been able to scale up that impact so that's on demand generation and then just you know being able to convert those patients onto new patient starts and dispensed volume uh and then just you know hitting the conversion metrics that uh that we have in place so i think both of those getting to and you know and obviously we've done multiple expansions right this is our third or fourth major expansion so as you you know are they tracking on the trajectory of which they are right now on the trajectory of you know uh conversion and demand generation as as the as the territories get mature and the and the reps get more time under their Okay.

Brandon Foulkes, Analyst — HC Wainwright & Co.

And when we think about the economics of a mature territory, how do we think about that sort of sustainable, mature market growth there? What drives it? Is it sort of continued new patients in their territory? Is it repeat treatments, subsequent flares? How should we think about that?

Nikhil Lalwani, CEO

Sure. So, Cotrophin is not a disease-modifying therapy, right? It's used for alleviation of symptoms related to flares and exacerbations. And so, you know, as a result, the patients that are prescribed cotrophin and for whom cotrophin works, those patients we see typically come back. And that's why you have refills, not just, you know, when the flares come back. So that's one metric. But obviously, the even more important metric is new patient starts, or not even more, but an equally important metric is new patient starts. And that just goes back to the addressable patient population, right? There's 285,000 patients. We're not reaching all those new patients with the 60% expansion, but we're reaching a much larger number than we were before. And just being able to reach more prescribers and reach the patients through that. So getting new patient charts and new cases initiated. Okay.

Brandon Foulkes, Analyst — HC Wainwright & Co.

We've talked a lot about Gantt, but I do want to just take a step back to the historical or existing caudropin specialties, right? Those look like they're continuing to grow as well. So can you just talk about how much runaway of growth remains in the specialties outside of gut?

Nikhil Lalwani, CEO

Yeah, a great question. You remember I talked about a million patients, I talked about 285,000 being the TAM for acute gaudi arthritis flares. But for the other specialties, the ones that we focus on, the key indications, existing specialties, it's 750,000 patients. And again, we're scratching the surface in terms of very early days in terms of number of patients served. So the addressable market there is large. And, you know, reaching those patients and there is significant opportunity, as I said, in the first half, we already saw 45% growth over the prior year with the folks that were already in the building. And then just continuing with that momentum as we expand and reach more patients with the existing specialties. And you're also seeing this. again this is about market growth you know both us and the competitor are trying to reach more patients uh and reach new prescribers you know over half of our even before the gout expansion over half of our prescribers are folks that were naive to acth and that continues to give us confidence that we can reach more prescribers and reach more patients as we as we uh address the unmet needs of these 750 000 patients in our addressable market okay and you touched on that and I do want to just dig down, right?

Brandon Foulkes, Analyst — HC Wainwright & Co.

So you have taken a very thoughtful and methodical approach to this drug. Where do you think continued clinical evidence could most benefit ACTH therapy going forward?

Nikhil Lalwani, CEO

Sure. So we've been investing both in generating clinical and preclinical data that can support clinicians in the use of ACTH. We've done a bunch of work in the preclinical evidence showing the mechanism of action and, you know, showing a differentiated mechanism of action. That's where we can talk about the engaging with all 5-malenocortin receptors, at least on an in-retro basis. And, you know, we're doing a phase 4 study in acute gaudi arthritis flares where we're comparing the 40 IU and the 80 IU and time to onset of action. And so generating with the hope with that phase four data is also being able to engage with the ACR and the other guideline community to see if ACTH can be added into the ACR guideline. So we think that those are the types of steps. We're also working with our physicians to initiate ISTs that will help generate more clinical evidence that will support further support the use of ACTH for the appropriate patients.

Brandon Foulkes, Analyst — HC Wainwright & Co.

Fantastic. I'm just going to move on to Alluvian, right, because I don't want to not touch on that. You know, what do you think needs to change for Alluvian to become a more meaningful growth driver for NI?

Nikhil Lalwani, CEO

Look, I think we are, we have the New Day study, Phase 4 study released last year, and this year, we've, earlier this year, we initiated, Oh, sorry, we released the six-month data for synchronicity for use of Illuvian in NIUPS. We have the full data release coming at a conference in Q4. We believe that will support, further support the use of Illuvian and give real new safety and efficacy data to, and different use cases to the clinicians to support, especially retina specialists, to support their further use of Illuvian. And then, you know, that combined with our continued push of commercial execution and access, improving the access with the challenges that are there on the copay funding side and looking at specialty pharmacy distribution as an alternative for the right patients. Those are the mix of initiatives that will help drive success of Illuvian. Okay.

Brandon Foulkes, Analyst — HC Wainwright & Co.

So if we think about some of the investments in the company we talked about earlier, balance that with a very good generics business and then also sort of bringing on a royalty stream as well.

Nikhil Lalwani, CEO

As we move forward into 2027, you've got this tremendous top line growth ahead of you, but how do you balance investments into the company, whether that be in different factors of your business against you know driving operating leverage yeah i think uh we've balanced driving growth and profitability as we've grown uh the company uh even in 26 you know we grew the top where our guidance has the top line growing 26 percent the bottom adjusted non-gap ebitda growing 27 even in a year we're spending an incremental 50 million in opex for the gout expansion so we we are you know we're looking to balance growth and profitability in 27 we will see operating leverage from the investments we made in the 50 million investment we made in the additional gout sales force we'll get a lot more sales in 27 from the same investment and it's not just the six month versus the 12 month of the gout sales but also much uh higher quarterly run rate So we are absolutely trying to balance both growth and profitability.

Brandon Foulkes, Analyst — HC Wainwright & Co.

Okay, fantastic. And, you know, if we do take a step back and circle three, five years ahead, you know, what do these investments look like and what does the company look like if we're sitting here three, five years from now?

Nikhil Lalwani, CEO

Yeah, we're looking to build a leading rare disease company. Cortrofin is an important chapter, but will be a chapter one of that story. And there will be other commercial products that we will add through to the commercial rare disease portfolio at some point. And after two or three acquisitions, we may start thinking about clinical bets and building the development capability. And then as we're doing that, our rare disease business will continue to support that from a capital allocation perspective by investing high single digits percentage or low double digits percentage of generic sales into R&D to keep that cash flow engine going. and supporting what is a high-performing generics business that we're also very pleased and happy with fantastic well Nikhil Steve thanks very much for joining me thank you thank you thanks Brian