Okay, good afternoon, everyone. Thank you for joining us. You know, for our next presentation, we're excited to have ANI Pharmaceuticals here with us. Our representative of the company to my right is Nikhil Lalwani. He's the President and Chief Executive Officer of the company. To his right, Stephen Carey is the Chief Financial Officer of the company. For those of you who don't know me, I'll just quickly introduce myself. My name is Glen Santangelo. I'm the analyst at Barclays responsible for the specialty Pharmaceuticals sector, among a few other things. You know, again, we're very happy to have you here, Nikhil and Stephen. Thank you guys very much for taking the time out of your schedules.
Oh, thank you, Glen. Thank you for having us.
Okay, excellent. Why don't we just sort of dive right into it. I mean, you know, 2025 was just a great year for the company and, you know, I finally think that we can sort of reposition you no longer as a Generics company that has Rare Disease assets. We're now gonna call you Rare Disease company that also happens to have a Generics business as you cross that 50% threshold. Congratulations on that milestone.
Thank you.
You know, maybe a good place to start is if you just wanna sort of level set everybody and talk about, you know, 2025 and the momentum you had sort of into the end of the year that set the stage for 2026. That'll be a good place, a good framework for us to dive in right after that.
Sure. Yeah. Thank you, Glen, and thank you for acknowledging our transformation into a Rare Disease company. you know, 2025 was important for the acceleration of that transformation into a Rare Disease company. as a company overall, we grew 44% on the top line and 47% on the EBITDA, adjusted non-GAAP EBITDA line. The growth was fueled primarily by Rare Disease business and within Rare Disease Cortrophin, our lead asset, where we grew 75%-76% to deliver $347 million in revenues in 2025. Our Generics business, which has played an important role in terms of providing EBITDA and cash flows, also grew 28% to $384 million and gave us strong momentum going into 2026.
As we head into 2026, we believe the acceleration of ANI into Rare Disease company remains our top priority. We have 60% of our revenues coming from Rare Disease, with Cortrophin growing to $540 million-$575 million from the $347 million we delivered in 2025. The Generics business, you know, with the significant outperformance in 2025 staying flattish in 2026 to deliver an overall total company revenues in excess of $1 billion to $1.055 billion-$1.115 billion. The adjusted non-GAAP EBITDA line to $275 million-$290 million. Importantly, as we're driving growth, we're also balancing profitability. We're growing 19%-26% on the top line and 20%-26% on the adjusted non-GAAP EBITDA line.
Okay, excellent. Well, thank you for all that background. I think it's sort of very helpful, you know, and congrats on everything you achieved. I mean, it's to see the 44% revenue and even have a little bit of margin leverage on top of that was incredible. You know, just looking at the stock, I mean, it's up a fair amount, you know, over the last sort of 12-14 months since the beginning of last year. I would have argued maybe even it should have been up a little bit more, but still, I mean, the market I think is slowly coming around. You know, it's great to see. Maybe that's a. You know, let's start with Cortrophin Gel because I think that's clearly top of mind for everybody.
You know, trying to come back to that comment on the stock performance versus the revenue growth and the operating profit, you know, growth that we saw. I think, you know, one of the concerns that we hear, which maybe is a good place to start, is just talking about the durability of this product and the growth. You laid out the guidance for 2026, which is helpful. Clearly you're confident. You know, how would you sort of explain to people to sort of give them confidence that Cortrophin Gel has a long runway here, and that, you know, 2025 was an aberration. What gives you sort of that confidence in the growth ahead?
Thank you for that question. You know, we believe very strongly in the robust multi-year growth potential for Cortrophin. It really starts with the patients. We believe the addressable patient population is significantly underpenetrated. If I take one indication as an example, acute gouty arthritis flares. There are 9.9 million patients in the country with that indication. However, only 36% receive treatment per year. Of those, only 8% receive injectable treatments because their flares are so acute. Our addressable patient population is 285,000 patients. That's what we think is addressable. A very small patient population among the much larger incidence. We're significantly underpenetrated, right? We're, you know, less than 10,000 patients for treating that indication versus a 285,000 potential addressable market.
The runway, and this is true and, you know, there's a slide on our deck that covers it across multiple sclerosis, rheumatoid arthritis, nephrotic syndrome, sarcoidosis, across multiple indications. It's across the category between us and the competitor. ACTH is significantly underpenetrates the addressable market across indications. That's really the key opportunity, the key driver of growth, right? Now, we are able to reach these patients, and that's proven by over 50% of our prescribers since we launched are prescribers that were naive to ACTH. They'd never written a ACTH drug before. We're able to reach these physicians and consequently reach this larger patient population by reaching these patients. When you think about the market, right, since we've launched in the last, you know, the market.
The deceleration slowed first and then last two years, it's grown 27% and 45% respectively. Really for us, this is a question about market growth, significant addressable market, and both it's beneficial to actually have two players out there that are trying to increase the share of voice of this as an alternate treatment option for the appropriate patients in need. On durability, a very important part is, you know, additional competition, right ?
What is the risk of additional competition? Look, the way we see it, this is a very this tough category to genericize. This is an animal-derived, porcine-derived, and it's then taken through a complex manufacturing process. There's a very large number of peptides that are immersed in a gel. To make an exact copy of this and show equivalence is very complex. There are companies that have tried in the past and not been successful just because it's a tough drug to genericize. When you think about, you know, someone going, starting from scratch and trying to develop a new drug application, you know, you have to go one indication at a time and run multiple studies and get approvals one indication at a time. We believe there's a long multi-year growth opportunity, and there's growth and durability in this profile.
Maybe I just wanna come back to one thing you just, y ou talked about is the ACTH market. You sort of talked about the deceleration s everal years ago, you know, when you launched this product, I think in 2022, you sort of re-accelerated the growth. You know, talk about, you know, give us a little bit of history here in terms of the deceleration of that market, what the issues were in the past.
Clearly you've had a positive impact, but, you know, talk about how big this market was prior to those Acthar Gel issues and the market decline, and what's your view on the TAM of the market today versus maybe what we would have thought five years ago? And I just ask because maybe it's the lack of confidence given the history in this market that maybe makes people, I don't wanna say use the word skeptical, but right, it certainly is on people's minds.
Sure. Yeah. The ACTH market was $1.2 billion in 2017. Then it reduced over time to about $600 million in 2021. We believe that the reduction in sales happened for a number of reasons that were exogenous, external to the efficacy of the ACTH product, and that involved the competitor having, you know, litigations, bankruptcy, other issues that, you know, that didn't really have to do with, you know, does an ACTH product help appropriate patients. We've launched in January of 2022, and since we've launched, as I said, that the market has reduced the degrowth and then really returned to growth. If you look at where we are exiting 2025, you know, the market's basically back at the previous peak.
Right? If you take the 4Q run rate or even the total year sales, we're essentially back at the previous peak. We're just getting started because the addressable patient population is much, much larger, right? You know, and if you think of where ANI's growth has come from, this has not come from share capture. A big portion of our growth is come from reaching new patients. 50% of our prescribers were naive to ACTH, had probably not even heard of the category before we launched. In addition, 15% of our volume comes from acute gouty arthritis flares, an indication that the competitor does not have did not have in that previous peak. We feel very confident of the ability to drive significant market growth by reaching the appropriate patients in need.
Can you talk about some of the differences between yourself and your key competitor, and you talked about the indications a little bit different, but if you could just sort of elaborate a little bit on the differences between the products?
Right. Both products are porcine-derived. However, there's a different formulation and different composition of peptides that are in their product as well as our product. There's also a complex and different manufacturing process for the active ingredient as well as for the API as well as for the finished dose formulation. The products are different. They're in the ACTH category, right? They have different indications. There's a number of overlapping indications that both products have, but they have infantile spasms that we don't, and we have a number of different indications. From a commercialization perspective, acute gouty arthritis flares is the main indication that we've been commercializing or focusing on for commercialization that they don't have.
All right, Stephen, maybe just a couple of quick financial questions before we leave Cortrophin. You talked about expanding the sales reps by 90 in the middle of the year, right? That's gonna add some incremental operating expenses and maybe drive some accelerated growth in the second half versus the first half. Also on the conference call, you sort of laid out a case that maybe some of the insurance verifications might be happening in January a little bit slower. That, you know, when we think about the first quarter, maybe it might be a little bit lighter relative to what we would normally expect. If you could just sort of walk people through the cadence of 2026 and how we should think about that 55%-65% growth that you expect for the year, how that may play out from a cadence perspective?
Yeah, sure. Absolutely. Thanks for the question. I think of the Cortrophin revenue cadence really in three different layers, Glen. Right. If you look at 2025, given the growth profile that Nikhil's been talking about, we had sequential growth throughout 2025. The base of the 2026 forecast is for that continued acceleration, right? All of the resources we had behind the product leaving the 2025 year are still in a growth mode and driving further utilization of the product. The base layer is continued evolution of growth in the product. With the always present for Rare Disease and for Cortrophin, a sequential step down Q1 versus Q4 of the prior year due to insurance reverifications. That's the base of the forecast.
The second layer of the forecast is the 90% additional employees that we're putting behind the gouty arthritis flares indication. That team is being recruited today and will be in the market detailing the product by mid-year. A step up in revenues in the third and fourth quarter as that team comes online and starts to become productive. The evolution of that team will continue into 2027 as they become more efficient. Those are the two core principles behind the guide. Then what we did on the year-end call, just to give external constituents further insight, is we did talk about due to the increased volume of verifications that need to occur, that we're seeing that taking a little bit longer in January. We see a shift of certain that volume, a slight shift of that out of January into later months. We talked about the first quarter being down.
It doesn't go away.
It doesn't go away. It just shifts back by a month or so. Therefore, right, we just gave a little bit more specificity to the first quarter.
Okay. All right. Can we shift gears and talk about your other Rare Disease asset, ILUVIEN? Has it been about 18 months since you acquired the product? I'm just trying to back up in my mind. A lot has happened with this product. When you rewind, could you just remind us the rationale for the deal, the changes you made to the label, you know. With a lot of those changes sort of now behind us, obviously, do you think there'll be greater focus on sort of driving that commercial success in fiscal 2025? If I were to label 2025, is that sort of transitional year for the product?
Sure. Yeah. Thank you. You know, the acquisition of Alimera was anchored in picking a therapeutic area or specialty that was synergistic with Cortrophin from a sales force perspective. We picked ophthalmology as a key therapeutic area. What we did is we expanded the sales force. We got about 31 reps from the Alimera acquisition. We added another 14 reps, and now we have about 45 reps that are out there promoting both Cortrophin and ILUVIEN to retina specialists as well as ophthalmologists. That's the industrial logic behind the deal. As you rightly pointed out, 2025 for the retina assets, ILUVIEN was a reset year. As we head into 2026, we have momentum from a number of the commercial and strategic initiatives that we put in place. We have a strengthened commercial team.
We have the successful deployment of initiatives from a marketing and, you know, sort of commercial initiatives to back the strengthened commercial team. We also had the release of the NEW DAY clinical study results. We're using that NEW DAY study results. We believe the results of that study will support the use of ILUVIEN earlier in the treatment of DME. That's been a positive that you know will carry into 2026. We had some challenges with funding support for Medicare patients that don't have adequate co-pay funding.
While there is none of that funding return baked into our guidance, what we have done and have had success with in 2025 is getting some of the leading retina practices to use alternate approaches for patients that have the Part D benefit to use that benefit to get access to ILUVIEN. An important part you mentioned, which is ILUVIEN is now indicated for both diabetic macular edema as well as chronic non-infectious uveitis in the posterior segment of the eye. We merged the label of YUTIQ, which was the original product, into ILUVIEN, and now just have one product that we're detailing. That's made it simpler for the physician offices as they deal with only one product for both indications, as well as in terms of maintaining inventory since this is, you know, a product that is.
Commercially, is that playing out as you expected, hopefully?
It is playing out as we expected. You know, obviously within uveitis, steroids are the standard of care. If you think of a lot of the innovation that's happening in the retina area, it's around reduced treatment burden and increasing the duration of care. ILUVIEN meets both those criteria by being a long-acting intravitreal injection, which, you know, microdoses fluocinolone acetonide into the eye over a three-year period. Yeah.
Okay. Well, we got about five minutes left, and I got a lot to cover, so I'm gonna start doing a little rapid fire. I'm gonna shift gears and I'm gonna shift to the Generics business.
Sure.
You know, you came off a great 2025. You know, you said the business grew 28%. Even the exit rate was very strong in the fourth quarter. You know, let's think about that year. In the first half of the year, you had prucalopride, right? On a 180-day exclusivity that probably benefited that. You had the partnered launch in the second half of 2025. Which may also be contributing to the growth. Are we setting ourselves up for a very difficult comp in 2026? Like, how should we think about that sort of growth year-over-year, just sort of given those events that benefited 2025?
Sure. Historically, our Generics business, we've oriented to high single-digit, low double-digit type growth, but we've outperformed that expectation every year. You know, we've essentially, if you look since 2021, we've grown at a 25% CAGR. We obviously had a very strong 2025. The anchors or drivers of that strong growth are a superior R&D capabilities and execution, supported by strong operational execution and a U.S.-based manufacturing footprint. All of these trends will carry into 2026. We invest high single-digit percentage of our generic sales into R&D, and that allows us to launch 10-15 new products annually, which will support in 2026, you know, the performance in 2026. You know, our orientation for this year is for the Generics business to stay relatively flat to last year's significant overperformance of 28% growth.
Right. Okay.
Yeah.
Perfect. All right, just moving on. The established Brands, it's only 4% of your revenue, so we're just gonna spend 20 seconds here. You basically grew another 16% in the fourth quarter. Could you talk about the durability of the growth there? Is it even worth having a conversation? I mean, you know, help us think how you've been able to sort of, you know, continue. I know there were some, you know, items in there that explain that growth, but is-
Yeah. Look, I think that from a capital allocation perspective, Rare Disease is our priority one. Generics and the Brands business creates a virtuous cycle of growth that allows us to take the EBITDA and cash flows from these businesses and then reinvest it into driving the growth of Rare Disease business. you know, we'll continue to capture opportunities that we get with the Brands business, but it's sort of if, you know, we have to be disciplined for capital allocation and make sure that, you know, we support Rare Disease, we support the growth of Generics with investment in Generics R&D, and then let Brands just play a role in terms of generating EBITDA and cash flow for the Rare Disease business.
Stephen, shifting gears to the gross margin. We got a big mix shift going on at the company, and it's not always easy for us to see the gross margin of all the different components of your business. Maybe you can sorta help us think through that a little bit and how the gross margin should trend. We know you have the royalty that's now stepped up in the highest tier with respect to Cortrophin. So help us think about that gross margin progression, 2025-2027, just sort of given the mix shift that's sort of transpiring.
Yeah, sure. When we think about our three businesses, we talk about our highest gross margin business is the legacy Brands business that Nikhil just spoke about. On the other end of the spectrum, the Generics business. In between is Rare Disease business, largely due to the royalty to Merck. As we think about evolution going forward, first of all, you know, 2025-2026 is influenced by those mix changes, but also a big influence is the non-recurrence of that prucalopride 180-day launch in the first half of the year. That's a big year-over-year item. As we think about things developing going forward, as Rare Disease sales continue to advance and become a bigger portion of the overall company revenues, that will be accretive to the gross margin line.
I know we're not way too early to talk about 2027, but as we get through these comp issues in 2026, we get through the sales force expansion, you know, hopefully, we start to see that leverage drop in 2027 on a gross margin side and on the EBITDA side, right? As you annualize those operating expenses that you plan to incrementally add in 2026. Is that like a fair characterization?
Yeah, that's a fair characterization. As Nikhil said a touch earlier, right? As we're driving the business for growth and the mid to long-term success of the business, we're very thoughtful in terms of balancing out the profitability profile.
Okay. Can we talk about the balance sheet? You know, the leverage is back down to 2x. Yeah, that's solid. You know, free cash flow. You know, what's the thought process around, you know, BD at this point, appreciating, you know, you clearly had a lot on your plate the last 18 months around the Alimera deal. Certainly have no shortage of things going on. But how should we think about the BD strategy at this point, given where the balance sheet sits?
Sure. We have significant growth opportunities organically, both with Rare Disease as well as Generics and durable and, you know, and high growth opportunities organically. We wanna make sure that the deals that we do sort of add to that. The focus is on increasing scope and scale of Rare Disease business. the near term focus is on commercial assets, right? Assets that do not have clinical risk associated with it. I think there are two types of assets, right? The ones that are synergistic with Cortrophin on a call point perspective. Secondly, and we're increasingly looking at this, are assets that leverage the rest of our infrastructure, right? Which is patient support, specialty pharmacy distribution, hub services, medical affairs, market access.
The rest of the Rare Disease infrastructure, it does not matter if they're in a indication or a specialty that is different from the ones that Cortrophin overlaps it, because it allows us to focus on Cortrophin and then overall continue acceleration of our transformation into a leading Rare Disease company.
We're out of time, but I did have one more question that I wanted to sort of squeeze in. You know, we sort of framed everything. You know, you exited 2025 on solid footing. You gave 2026 guidance sort of well above expectations. Again, I look at the stock essentially flat sort of year to date and, you know, we can discuss the different reasons for that. But, you know, you're here at a conference, you're meeting with investors, and I guess what type of feedback are you getting?
And is there anything you wanna share with the investors here in terms of dislocations, in terms of maybe the questions you're getting, what they think versus what you see as reality or your opinion? Like, how do you sort of reconcile sort of that disconnect maybe with the recent performance of the stock, recognizing, you know, 2025 was a pretty decent year?
Sure. No, thank you. Thank you for that opportunity, Glen. We believe that the long-term growth and durability of our businesses is underappreciated in Rare Disease. I think that that's the message that I would leave with investors.
Yeah, that's what I was gonna do. I was gonna flip it to you for the last word. I mean, so in your mind, you know, you think it's the lack of confidence in the durability of your Rare Disease assets and the growth outlook. I mean, I wanna give you the last word with investors. Anything you wanna leave anyone with? Anything you think people misunderstand? And w e'll close it out.
Yeah. It's not the lack of confidence. I think that it's, you know, it's just understanding that more. This is, you know, we have patents into the 2040s on Cortrophin. There is a large addressable patient population that we can help address the appropriate patient. There's a multi-year growth opportunity with Cortrophin. In ILUVIEN, we have, you know, a large addressable market that we're addressing, 10x what any patients that we're treating today. Both drugs are tough to genericize, so we have a very long runway. We have a growing, you know, long-term growing and, you know, durable Rare Disease portfolio. We have a balance sheet that can support expansion of the scope and scale of our Rare Disease business.
Okay. Nikhil and Stephen, we'll leave it there. Thank you very much. ANI Pharmaceuticals.
Thank you, Glen.
Thank you.
Thank you for joining us.
Thanks so much, Glen.
Thanks.
Stephen, thank you very much.