Hey, everyone. Good afternoon. I'm Gary Nachman, a Senior Biopharma Biotech Analyst at Raymond James, and we're very excited to have Nikhil Lalwani, CEO of ANI Pharma, with us. ANI is a Hybrid company, as I like to call it, with a growing rare disease business driven by key product Cortrophin, and was expanded recently with the acquisition of Alimera, and also a niche generics business that's been growing consistently in the double digits. They just reported earnings on Friday, gave very strong guidance for 2025, actually better than expected. The key growth drivers are clicking really nicely. It's great to have you here, Nikhil, to talk through the ANI story. Thank you for coming. Thank you, Gary. It's great to be here. Great. Since this is probably a generalist audience, people may not be as familiar with ANI, let's just first spend a few minutes giving a high-level view of the company's strategy, how you've been evolving, especially to be more of a rare disease company, and then just a quick overview of the key franchises, just to lay the groundwork. Sure. Good afternoon, everybody, and thank you for spending time with us. ANI, as Gary just pointed out, has been evolving and transforming into a rare disease business as its primary driver of growth. In 2025, our guidance shows that rare disease will account for 48%-49% of the company's revenues. That number was zero in 2021. We built the rare disease business through the launch of our lead rare disease asset, Purified Cortrophin Gel, which delivered just under $200 million of revenues in the third year of launch. Our guidance for 2025 is $265 million-$274 million. As Gary alluded to, we expanded the scope and scale of our rare disease business in 2024 with the acquisition of Alimera. Throughout the acquisition of Alimera, we acquired the ILUVIEN and YUTIQ franchise, which are synergistic with our Cortrophin Gel franchise. In that, a key call point, where there is call point overlap, is ophthalmology. That business, ILUVIEN and YUTIQ, or that franchise, ILUVIEN and YUTIQ, will do $97 million-$103 million in 2025. Our total rare disease business in 2025, our guidance is $362 million-$377 million. To put it in context, in the context of our overall guidance for the total company, it is $756 million-$776 million in revenues for total company, of which $362 million-$375 million will be from rare disease. We look at rare disease as the primary driver of growth and will grow this franchise both organically, where we have significant multi-year growth opportunity, both in Cortrophin as well as the ILUVIEN and YUTIQ franchise. We also have a generics business. This business has delivered double-digit growth for three years in a row, and our guidance for 2025 was also to deliver low double-digit growth. We delivered $301 million, approximately, in sales for our generics business in 2024 and look to deliver low double-digit growth for that business. That business's growth is driven by a strong R&D capability that we have. We launched 17 new products last year and look forward to launching 10-15 new products this year. It is really this growth, sorry, this R&D capability, along with a U.S.-based manufacturing footprint. We have three plants that are all based in the U.S., two in Minnesota and one in New Jersey, along with operational excellence. Those are the three sort of pillars of growth for our generics business. Thirdly, we have a brands business, what we used to refer to, for people following us for a longer period of time, as established brands. That brands business is high margin, low working capital, and very strong cash flow generation. These portfolio businesses have enabled ANI to deliver over 30% CAGR on revenues and over 30% CAGR on profitability over the last three years and is a great platform for us to continue building on. Our guidance on adjusted non-GAAP EBITDA for 2025 is $190 million-$200 million of adjusted non-GAAP EBITDA. That is an overview of ANI, and happy to share more. Yeah, that was definitely a good overview. There is no question both the rare disease and the generics business have both been going along really well. Do you think it makes sense to have both of those businesses under one roof? Are there any synergies that you realize across these businesses that helped you? Yeah, thank you. The evolution of ANI started with generics and brands, and then we built a rare disease business from scratch. I think that both of these businesses, right, I told you we built a rare disease business from zero to $362 million-$375 million. In the same time frame, we doubled the generics business from $150 million-ish - $300 million. Both businesses are growing. The growth comes from BD and M&A for the rare disease business, right, organic plus BD and M&A. For the generics business, it's OpEx investment and R&D to continue fueling the 10-15 launches every year and driving the high single-digit, low double-digit growth. These businesses are synergistic in several technical areas. As we're navigating on the generic side of the business, we have over 100 product families. We're engaging with the FDA constantly on applications. We run three manufacturing sites, which gives us a very good understanding of compliance and what it takes to, on the rare disease side of our businesses, our products are manufactured at supplier sites, at CMOs, but we are able to engage with them more meaningfully. On the technical front, there is synergy across these two business lines. I think that the generics and the brands business has enabled us to incubate and build this rare disease business from scratch. While we are moving the center of gravity towards the rare disease business and continuing to expand that, the generics business and the brands business play an important role in terms of contributing EBITDA, cash flows that help us keep growing the rare disease business. There's no sense that that makes a lot of sense for the transition phase. Do you think longer term, both of these businesses should coexist under one roof? I know investors struggle with the multiple sometimes because you probably, while you said center of gravity is shifting more to the rare disease, the multiple still is closer to the generic type multiples. It's just a little bit of a drag in that sense. Longer term, do you think you want to have both of these engines fueling the overall company? Yeah, look, strategically, we consider all options constantly. At this time, what makes most sense is to continue driving both businesses because we have good impetus at this scale and size to continue driving both businesses. The game plan is clear, and we're doing that. At some point, can we revisit those questions? Maybe. Look, we're not the first company to try and transform, right? I think that what is remarkable is in a four-year time frame to go from having 0% of your business to having half your business being from rare disease while doubling your generics business, right, I think is quite remarkable. Full credit to the team and to our customers and partners and suppliers to help us and the investors to help us achieve that. I would say that when you think of ANI rare disease, I think that we'll look to continue expanding that. When you look at ANI generics, it's fueling our expansion in rare disease too. That's how we think about the portfolio of businesses that we have today. Okay, now, that's very fair. Shifting more to the rare disease business, which has been the biggest driver of growth. Like I said, you gave 2025 guidance. You just raised it from a conference earlier in the year. I think Cortrophin was one of the key reasons behind that. The guidance represents 36% growth this year. Let's get into that. Talk about the ACTH market, which has been growing very nicely. It's a classic duopoly with a competitor that you could talk about. The sort of growth that you've been seeing, this was a beaten-up market, but now there's considerable headroom going forward. Maybe talk to the overall market and your positioning there. Sure. Yeah. When we think of ANI rare disease, the anchor is the patient. And ACTH therapy benefits a certain number of patients today. That number of patients is half the number of patients that benefited from ACTH therapy in 2017 when the category was at its peak. We launched Cortrophin Gel in January of 2022. Since we have launched, the category, which had been declining, the rate of decline slowed. In 2024, if you add our actuals with the competitor's guidance from 2024, it implies a 24%-25% growth and total market being at $660 million. Maybe just quickly explain ACTH in general, how it's used. It's sort of like a steroid, but just so people understand the type of drug that we're talking about. Sure, sure. ACTH is a drug used to treat autoimmune indications where other lines of treatment have not worked. It's derived from the pituitary glands of porcine. So it's porcine-derived. It has multiple indications. Both the competitor and we have multiple indications. It was a category of drugs that was approved many decades ago and then was discontinued by some. There was only one ACTH product available in the market, which is the competitor's, for many, many years until we launched our purified Cortrophin Gel. Essentially, there's a significant overlap in indications that we have and the competitor has, except for two main ones that I can speak to. One is they have infantile spasms and we don't. We have acute gouty arthritis flares and they don't, right? The competitor is Mallinckrodt. For those new to the story, because I keep saying competitor, I do not want you to wonder who we are talking about. Going back to the total market, if you add their guidance, which was given in November, and they are reporting next Monday, I think, or next Tuesday. If you assume their guidance, which was given in November, and our actuals, the market from declining grew 24% and will be about $660 million in 2024. That is almost half of what it was in 2017, which was $1.2 billion. I also, again, anchored it in the patients because the number of patients that are being treated today are also almost half the number of patients being treated back in 2017. Even beyond that, right, not just going to where if you talk about headroom for growth and which patients can benefit, if you take the leading indications, right, rheumatoid arthritis, multiple sclerosis, nephrotic syndrome, when you look at patient populations from an epidemiological perspective and say, what are patients that could benefit from ACTH therapy for whom other therapies are not working optimally, that number is substantially bigger, like multiples higher, right? When we're talking about the headroom for expansion, it is even beyond what it was, the peak that was there. The $1.2 billion. The $1.2 billion in the past or the number of patients in the past. Now, there are lots of markets that have, there are lots of products that have large addressable markets. The question is, can you really get the product to these patients? One statistic that we shared, a parameter that we shared on Friday for the first time is when you look at our prescriber base, prescribers of Cortrophin, 40% of them, Cortrophin Gel is the first ACTH drug that they wrote, which means that they were naive to ACTH or had never used any ACTH therapy or the competitor's therapy. For us, this is about market expansion, about getting this Cortrophin Gel to the appropriate patients in need. It is not about stealing market share or about anything. It is really about increasing awareness. They are growing and we are growing. I think that's so the opportunity is significant. And we're investing to continue strengthening the franchise and capturing this opportunity. Yeah, another point that you had made on Friday was also that the acute gouty arthritis flares, that's been sort of a gateway indication. Very quickly, that's taken 15% of the overall volume. That's contributing a lot to the additional physicians that are trying, right? Yeah. Acute gouty arthritis flares is an indication we have and the competitor does not. It accounts for 15% of Cortrophin usage. When you look at the prescribers that do write for acute gouty arthritis flares, 15% of them, acute gouty arthritis flares ends up being the first indication that they write for, but then they also write for other indications. Hence, they become a gateway, with one indication being a gateway for them considering Cortrophin for other indications that it could be appropriate for. Okay. Another important growth engine within the Cortrophin franchise is the Ophthalmology piece, that indication, which I think is uveitis. Maybe just talk about the benefits that you've gotten from the Alimera transaction that brought a bigger infrastructure and how you've been able to leverage that for synergies. Thank you. When we acquired Alimera, Alimera had the ILUVIEN and YUTIQ franchise, and they had about 30 sales representatives. What we did after the acquisition, and this was part of the deal thesis, is to create a combined sales force of 46 sales reps to go out and reach about 3,600 Ophthalmologists. As they were doing that, to be promoting Cortrophin, ILUVIEN and YUTIQ The early signs of the combined sales force are positive. For Cortrophin, we've seen a doubling of the number of new patient starts in the fourth quarter versus what we had in the third quarter. We look forward to sort of continue updating you on the progress of the combined Ophthalmology sales force. Okay. Maybe the last piece, just in terms of the sales force, you also just added 20 reps for the initial indications. I think I even asked you the question on the call, just about how you evaluate the ROI when, I mean, you have this major growth driver and you're being very selective in terms of where you're putting additional spend. So far, you've been getting a good return on that. Maybe just talk to these additional reps and if we could see more down the road. No, I think we have honed over the past three years the ability to figure out the highest ROI commercial efforts. We initially launched with a sales force that was detailing across multiple indications. We then launched a pilot sales force in pulmonology and also in Ophthalmology to try those new indications out. When we saw traction in Ophthalmology, that's when we created the combined Ophthalmology sales force with the Alimera acquisition. We have 46-ish sales reps that are detailing into Ophthalmology three products. We have a much smaller team dedicated to pulmonology with just Cortrophin. There is the original team that was detailing into all indications other than pulmonology and ophthalmology that we've then added 20 reps to. That is our sales force. The good fortune we have is there's actual growth opportunities across these indications. We're continuously iterating and calibrating on where is the highest ROI commercial efforts to be done to drive growth for the franchise as well as continue getting the operating leverage necessary on the P&L. Okay. And then last one on Cortrophin, then we'll shift gears a little bit. New news from Friday is you got your prefilled syringes approved. So congratulations. People might not think that's a big deal, but talk about why you think that's going to contribute just in terms of how it's administered and maybe how you factor that in the guidance for this year. When you think of Cortrophin Gel, these are 5 ml or 1 ml vials, which are largely self-administered at home. A patient that's administering this drug has to take a syringe, draw the drug out from the vial, from a 5 ml vial, and then inject themselves, and then put the vial back in the fridge and then do it once more and once more. What the prefilled syringe does is for patients that have dexterity issues or for patients that just find this process to be onerous, right, of a multi-step process, it reduces the step in the administration. Now you have a prefilled syringe, all you got to do is inject yourself and then dispose of the syringe. That's helpful for a subset of the patients. What it does is, look, it adds another presentation that is appropriate for a subset of patients. We now have a 5 ml vial, a 1 ml vial, which was focused on acute gouty arthritis flares for being used in the prescriber's office. Now we introduced a prefilled syringe. We are continuing to do work on other aspects to enhance patient and prescriber convenience. We will talk more about that as we progress. Okay, great. Let's shift over to ILUVIEN and YUTIQ. On the flip side, that guidance came in a little below what people expected and below the Q4 run rate. There's a transition going on there. One, there's a couple of things that you had highlighted. Pressure in the first quarter just from Medicare reimbursement challenges with Part B drugs, which is in general. That's not specific to your product. Two is getting an additional indication on the label for ILUVIEN and then ultimately having that as the only product that you're promoting on the market. That helps also from a supply standpoint. Why don't you talk to those different dynamics driving that business? I'll talk first about the market access issue that was being faced in the first quarter. Essentially, there are programs that provide support for patient responsibility towards drugs. Some of those programs were underfunded in the first quarter, and that had an impact. What we're doing about that is, first of all, patients that need access to these drugs and cannot afford their responsibility or their copay, we have a robust patient assistance program in place to support them to ensure that they can get the product. Second is we're working with the prescribers to understand changes that they're making in their prescribing patterns as a result of this change and refining our approaches accordingly. People understand these are implants that are injected into the eye in a Physician's office. That's right. You'll talk about the indications after, but just. Yeah, ILUVIEN and YUTIQ are both implants that are implanted in the eye. They last for multiple years. They essentially are used, one is indicated for the treatment of diabetic macular edema, which is ILUVIEN. YUTIQ is indicated for non-infectious uveitis affecting the posterior segment of the eye. They're implanted in the physician's office. The active is fluocinolone acetonide. One has a 0.18 mg strength and the other is 0.19 mg. They're essentially the same ophthalmic implant. To Gary's point, it's implanted in the physician's office. It is important for the physician to ensure that they're obviously getting reimbursed, right, because it's buy and bill Part B, right? We're working with the prescribers to understand what changes they're making and consequently, are there any refinements that we need to do in our approach. As you said, Gary, this is not specific to ANI. This is all Part B, whichever drugs these foundations support or these programs support. Yeah, I think that's that transition or change that we're working through and is factored in our guidance. The second is after we acquired Alimera, it had two products, ILUVIEN and YUTIQ. We learned that the CMO, and this was through the closing and after, that the CMO that was manufacturing YUTIQ got a warning letter, which is iPoint. Over time, we explored different options. Obviously, Alimera had been exploring different options after they bought. Alimera bought YUTIQ from iPoint a couple of years before our transaction. We were exploring different options. What we had done is really we had engaged with iPoint even before the deal closed between signing and closing and even more so after closing to address the issues that came up in the warning letter to support them. That was going well. We also explored other opportunities to enhance security of supply for both products. Where we netted out and the option we went with is, as I was saying a few minutes ago, ILUVIEN and YUTIQ are essentially the same product. They have fluocinolone acetonide as the active. They are 0.18 mg strength and 0.19. Really the 0.19 is because it is 0.18 and a few decimal points. It is a rounding. The clinical trial for the indications was basically done on the same product. That means the clinical trial showing that the drug works for DME and that it works with diabetic macular edema and for NIUPS, Non-Iinfectious Uveitis Affecting Posterior Segment of the eye, was done on the same implant. What we have done is to simplify our supply chain and enhance the supply security. We are consolidating both indications on the ILUVIEN label. ILUVIEN will now be the only product that is being sold, the only brand that is being sold. It will have both indications. The manufacturing of ILUVIEN will continue being done at Siegfried, which is a CMO in California that has been doing ILUVIEN manufacturing for over 10 years. We have extended our manufacturing agreement with them for another five years until 2029. We are partnering with them to drive a capacity expansion at that plant. More space will be dedicated for us and we are adding a second manufacturing line. They were last inspected in 2023 and received zeo 483s. That means no observations from the FDA. The majority of our prescribers that prescribe YUTIQ have also prescribed ILUVIEN. They are really this very similar product or almost the same. There is a slight difference in the implanter, which again, because the majority of our prescribers that have written for YUTIQ have also written for ILUVIEN, the transition would go smoothly. Both these transitions are factored into the $97 million-$103 million of guidance that we have given for 2025. Okay. Just let's round out these two products. You're at $100 million run rate for this year. You make your fixes. You get the additional indication. You're comfortable with the manufacturing and the supply. You have some additional data sets. You don't need to get into that. Where could this franchise go? What's a realistic TAM for it? Can you double it potentially? Yeah. I mean, look, the long-term potential of both of the franchises is intact. DME has 53,000 patients for whom anti-VEGFs, which is the standard of care, do not work optimally and that show positive response to steroid trial. That means that they show that a drug like ILUVIEN could work for them. Off that 53,000, today we're servicing less than 5,000. The opportunity is dramatically higher. The TAM is 10 times higher. For uveitis or non-infectious uveitis in the posterior segment of the eye, same thing. Less than 5,000 patients with a TAM that is many multiples higher. Both this franchise can go much, much higher as we work through this transition. That is the reason why we did this acquisition. Okay. Let's spend a minute or so on generics. Hard to ask a lot of questions on generics because there's not a lot of visibility, but you just keep executing and launch new products and you just announced a new one with 180-day exclusivity. That's going to contribute very nicely. Just summarize what's ANI's secret sauce with your generic, your niche generics business, how you're able to consistently get certain types of products approved, competing in certain markets to generate that kind of growth consistently in the double digits. Yeah. Look, the secret sauce is three pieces. One is finding the right products. And we have a portfolio and pipeline team that's been doing this for years and years, even before they were at ANI when we bought Nvidium, which is the company that's R&D engine is the heart of the ANI R&D today. That's one. Second is R&D execution. We got approval for and launched 17 new products in 2024. We've been doing 10 - 5 launches every year. That will continue in 2025 and beyond. It's R&D execution and just ensuring that the team is focused, that we're continuing to invest a percentage of sales in R&D, and then letting the team do what the team does. That's second. Third, equally important is operational excellence, right? Running three manufacturing plants, ensuring that they're delivering the highest output possible, they're making the right product, ensuring that they're compliant, strong FDA track record. That's it. I mean, those are the three main pieces, obviously. My commercial head and commercial team will not feel appreciated if I don't say this. It's true that then bringing this all together and taking it to the customers, being a supplier that is easy to work with and a trusted supplier that can help customers in moments of need, I think that's the secret sauce. Okay. Last quick question, and we're just about up on time. Just in terms of continued appetite for M&A, you've been acquisitive just at the Alimera deal in the fall, forward leverage is two and a half times. Do you need to do deals? Are you still being opportunistic? Do you have enough organically that can drive the growth that you want? Yeah. We definitely have strong growth drivers between our generics business as well as our rare disease franchises organically to drive growth. In the near term, we're focused on driving that growth as well as working through the transitions on the Alimera acquisition. Having said that, for rare disease, the scope and scale will increase through BD and M&A. We're constantly looking. Opportunistically, if something comes up, we will consider it. Having said that, from a leverage standpoint, right, from a leverage standpoint, historically, ANI has never gone for more than three turns of net leverage other than for a very short known period of time. We'll keep that kind of fiscal discipline in mind as we think about driving growth.