All right. Hello, welcome to the Jefferies Healthcare Conference. My name is Dennis Nie, biotech and spec pharma analyst here at Jefferies. I have the wonderful pleasure of hosting ANI Pharmaceuticals. We have the CEO, Nikhil Lalwani, here with us, as well as CFO, Stephen Carey. Welcome, guys.
Thanks, Dennis.
Thank you, Dennis. Thank you for having us.
Before we go into Q&A, would love to pass it over to you to just give some opening remarks in terms of where ANI is in its 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.
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 $1.08 billion to $1.14 billion for revenues, and $285 million-$300 million in adjusted non-GAAP EBITDA. Those are the numbers. 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. We have two assets with durability and high growth, Cortrophin Gel, our lead rare disease asset, and ILUVIEN, which is our second rare disease asset. We also have a thriving generics business, which has delivered very strong growth over the past few years.
Along with our smaller brands business, the generics 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 ILUVIEN. For Cortrophin, we have continued strong growth across our target indications in nephrology, neurology, pulmonology, ophthalmology. 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 gouty arthritis 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.
As a result, we believe that there is a strong multi-year growth opportunity for Cortrophin. ILUVIEN 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 Alimera in 2024. Like Cortrophin, it also operates in both DME and NIU-PS 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. That's in terms of 2026 priorities. 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. 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. Yeah.
Perfect. I have to focus on Cortrophin.
Yep.
It's one of the biggest growth drivers of the company. Guidance this year is $540 million to $575 million.
Yep.
You guys had a good Q1. You guys were squarely right in the middle of your own soft guidance for Q1. That was fantastic. You soft-guided Q2, right? I suppose the implied guidance was around $118 to $128 for Q2, right? There is a fairly big step-up from Q1 to Q2 from $75 to that range. Wanted to ask you, what is driving that step-up, and of course, your confidence in achieving your guidance for the full year?
I think number one, the most important driver of Cortrophin opportunity and sales is the fundamental underlying market demand. Across our 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 under-penetrated. If I take acute gouty arthritis flares as an example, there are nine point nine million patients in the U.S. that suffer from gout, but only eight percent of them have one and a half to two flares per year and also receive an injectable treatment. 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 between us and even the competitor have very low penetration levels in. 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 reverifications 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. In April, we had the highest number of new patient starts, as well as volumes dispensed of all time. That momentum has continued into Q2. When we look at 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. It's really coming back and growing above those levels. Importantly, in Q2, we've 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 gouty arthritis flares and to primary care and podiatrists. We're targeting about 7,000 of these. Our recruitment and build team build-out is on track. Almost 80% of the team was recruited and trained and in the field in May, and then the rest will be rolled out by June.
If you think about it, again, we expanded our field force by 50%. When we added 64, we expanded it by 50%. That's inputs that'll 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. 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. Last point I would say is, maybe two more points. One is if you just look at 2025, 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.
Lastly, it's a two-player market in ACTH, and both us and the competitor are looking to expand the market and grow the market. On a combined basis, the market is expected to grow about 30% if you add their guidance and our guidance. Again, just to reiterate that the fundamentals of the ACTH market are intact, That's really driven by the addressable patient populations across indications that are significantly under-penetrated.
Got it. Before we dig a little bit deeper into the gout expansion, when you look at IQVIA, we can all see these trends, but I would argue because it's a specialty product, it's not perfectly captured, right?
That's why when you guys reported Q1, you mentioned April was the highest month of demand ever since launch. Now that we're in June, can you make any comments around May?
Yeah. I'm not a big fan of giving quarter-to-quarter guidance, and then an even less fan of giving intra-quarter guidance. We reported less than a month ago in April. I think what I can say at this point is regarding that the momentum continues. Our gout expansion, you'll come to that, our gout expansion is on track. 80% of field force is in the field through May. The early feedback is positive. They're reaching out to new prescriber base that largely did not know about Cortrophin and certainly didn't prescribe it. 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. We're targeting about 7,000 HCPs. As they're bringing this treatment option, it's to an experienced and seasoned sales force.
The early momentum has continued there. Look, this gout expansion, for folks a little less familiar, was all driven based on the success we saw in 2025 in pilots we did. We took 10 territories and said, "Hey, in those 10 territories, focus on primary care and podiatry." They had great success. 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. The momentum in the target indications in pulmonology, nephrology, neurology, and the core indications continues, and then this expansion is on track. 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 has been strong and the early feedback is positive. Yeah.
Okay. If IQVIA data for May showed a decreased month-over-month, how believable is that data?
Sorry?
If the IQVIA data showed a decrease month-over-month from April to May, how believable is that data?
Look, I think as far as IQVIA data goes, we are hearing 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 is showing in other products. To be helpful to investors, 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.
in our internal data. Yeah.
Okay. Point is there's momentum going into Q2.
There is momentum, yeah.
Right. 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. Now, I believe all that has been worked through, so going into Q2, you do have that momentum, right.
That's clear. Yes. The re-verifications is a topic of the past.
Yeah.
That has been worked through as we began Q2. Yes.
Okay. for the gout expansion-
Yeah
You mentioned early feedback, right? Maybe give a little bit more color in terms of receptivity from these PCPs and podiatrists. How comfortable are they in prescribing such an expensive product for a three-to-five-day course for a flare? Yeah, just some sort of additional color they can give would be helpful.
Great. I think we should start with where does Cortrophin Gel fit into.
gout treatment paradigm. Cortrophin Gel is not disease modifying. It's meant for treatment of flares and to alleviate the symptoms associated with flares. It's for patients that have the most severe acute gouty arthritis flares. Those patients have tried the NSAIDs, some of the other treatments like colchicine, allopurinol, et cetera, and they're just not controlled, or they have high side effects to those treatments. 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. When you come to these primary care physicians and podiatrists, what we're seeing is, and we saw these in the pilots, is that some of these severe acute gouty arthritis flares patients are being treated by podiatrists and primary care physicians.
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 gouty arthritis flares patients? We analyzed claims data and developed a list of about 7,000 HCPs that treat these patients with the most severe acute gouty arthritis flares. 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. 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. Really, this is a late line, last line treatment options to help control their flares.
That's the ones that they're willing to try Cortrophin Gel as a treatment option for. To your point, these offices probably 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, obviously, from the pilots. To be clear, gout was approximately 18% of our volumes, even from other specialties, even before we did this expansion. 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, neurologists that also Oh, sorry, nephrologists and rheumatologists that also treat gout patients.
We're providing these offices the support, the extra support that's needed, to be able to get patients on therapy.
Some of the feedback from doctors has been that around the access aspect of Cortrophin, and not just for you guys, but also for your competitor, it's just incredibly difficult. There's an immense sense of fatigue around prescribing, right? Part of your solution is, you mentioned you're expanding the sales, not sales force, but the team by 90. 60 of them are reps, 30 are patient support services and reimbursement, things like that. 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?
Yeah, I think, to be able to speak about the expansion, we'll probably need a bit more time.
The intent is very much there, and the learnings from the pilot are there to improve the access and the enrollment-to-fulfillment process. We're making investments not just in people, but also systems and processes to improve, and make it easier for the physician and offices. 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.
It's not that they've not done any, but I think that we're working with them to. Again, we should not forget at the end of every enrollment form, at the end of every vial or prefilled 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. 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.
Okay. Maybe remind me, when a patient comes into the physician's office with an acute flare.
Yeah
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?
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 the many alternative treatments. 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. 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. Those are the patients that we say, and then we talk about Cortrophin and the differentiated mechanism of action, and talk about those are the patients to consider for Cortrophin. I think that's how it works from a practical standpoint.
Almost all patients that take Cortrophin have stepped through multiple other therapeutics before they're trying Cortrophin for flare management.
Does that happen within a single flare, or the patient just has to have a history of not being responsive to NSAIDs during these flares?
Yeah, typically, these are patients that have had flares before, and tried other therapeutics. 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. That's when they consider Cortrophin. It's not within a flare. Sometimes, 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. It's also we focus on being flare-ready. 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? A multiple sclerosis flare or exacerbation may be different.
from an acute gouty arthritis flare.
For gout.
The severity varies, but it can be days.
Okay. That's super helpful. You mentioned you guys have targeted or have identified 7,000 HCPs.
Yeah
Right? As part of this expansion, can you comment on how many acute gouty arthritis patients that those 7,000 doctors address or have under their care?
Yeah. 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 that helped us identify that these are the ones serving the most number of acute gouty arthritis flares patients. We identified territories. They're not necessarily covering the entire country, 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
Sorry, detailing
is it a sizable, like a big chunk of the 200-some thousand that you have?
It's a meaningful input into the $285,000.
Okay.
Remember that we also have nephrologists and rheumatologists that also deal with severe acute gouty arthritis flares patients, and so that is complementary to this group, right?
Our expansion here is to try and reach more of those patients than the ones that we're already reaching through nephrologists and rheumatologists.
Does access to Cortrophin, is it different among the different channels, meaning Medicare, commercial, or Medicaid even, or VA? Just curious what your experience is there.
Yes, it varies by channel. As far as a competitive category, it's largely one of two. It's parity access for both players.
I guess, is it more difficult, or does it take longer for prior auth to get actually approved in each of these channels?
Not necessarily. I think that they each have their utilization management-
Prior auth, and step-through criteria. Yeah.
Okay. The point is the expansion's ongoing.
Yes.
Right? You guys are very confident in the second-half acceleration that'll come from this expansion, right? 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.
Right. That's absolutely correct. I think the main thing about the back half is if you just, again, step back, we did $347 million in sales last year. When we guided to $540 million to $575 million, we had said that the bulk of that growth would come from continued momentum with the team that we already had in place. You'll see that ramp. We also had that same ramp in 2025. We'll see continued ramp there from the team that we already had in place. 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. That will also drive additional sales in the back half.
Yeah. Maybe talk a little bit about the, like we've just been talking about 2026, but just talk a little bit about the durability of the franchise.
Right. We believe that there's a strong multi-year growth runway for Cortrophin. It is a tough drug to genericize. Obviously with us also having a generics business, we know and we've been studying what it takes to genericize this drug. 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, there is this large patient population, so there is a multi-year growth opportunity. Yeah, just that both growth and durability are there with this franchise. Yeah.
Okay. Last question on Cortrophin, I promise.
Yeah.
Look, access for Cortrophin and the competitor is obviously difficult. I think we all know that. That's kind of the status quo. I'm wondering if you're thinking about IRA, right? If or when that could happen, you don't have to give a specific time, but 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 formulary, right? Does that all of a sudden open up access, right? Yes, price might take a hit, but the potential volume that could come from that could offset that price. I'm just curious if you've thought about that.
Sure. Look, IRA is an evolving landscape. IRA has multiple components to it. There's the Part D redesign, there's the inflation rebate, and there's the drug price renegotiation. We already saw in 2025 a modest tailwind from the benefit redesign and the inflation rebate. We saw that, 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. Net-net was a modest tailwind. In terms of the drug price negotiation, this is an evolving landscape. To the point you made, Dennis, that there's a balance between improved access and pricing.
We believe that we continue to remain bullish and believe that Cortrophin will be a meaningful product for ANI in the future, even after the drug price negotiations and we think that that's several years away. Obviously, it's an evolving landscape. We'll continue to monitor it and I'll be happy to update as we go along. Yeah.
Conceptually, does that make sense, or it's still kind of TBD at this point?
No, conceptually you are spot on. Drugs that are negotiated are put on formulary and therefore the access and for all indications and the access improves.
Okay
especially when you compare it with where Cortrophin and Acthar are today, it would improve significantly.
Okay. Thank you. Maybe in the last few minutes, on Q1 you guys talked about this licensing deal.
Yep
IP licensing deal that you did with Harmony. Talk a little bit about that. How material could that be? Harmony also has a phase III data set in their high-dose WAKIX study next year, so that might drive incremental value in that royalty stream. Can you just talk through the rationale of that deal and what you could potentially do with that royalty stream?
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 Novitium had developed. It's a good example of how we're focused on bringing the strengths across the entire ANI platform to bear to create value for shareholders. For Harmony, it was a way for them to add to their intellectual property estate as they manage their pitolisant 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.
We have a low single-digit royalty in their pitolisant franchise, with the current product being WAKIX, with roughly $1 billion of sales per annum.
Okay, perfect. Assuming the phase III data is positive, that extends the IP of that franchise, right? Presumably, sales will continue to go up and then the royalty stream would go up as well.
Yeah, because the royalty stream is on all formulations of pitolisant.
All right.
That's correct.
Perfect. Well, I think we are out of time, but thank you guys so much for being here.
Thank you, Dennis.
Thank you, Dennis.