All right. Good afternoon, everyone, and thank you very much for joining us at the H.C. Wainwright Global Investment Conference. My name is Brandon Folkes. I am one of the Equity Research Analysts here at H.C. Wainwright. Next up, we have a fireside discussion with ANI Pharmaceuticals, and joining me from ANI is CEO, Nikhil Lalwani, and CFO, Stephen Carey. Thank you to both of you.
Thank you.
Thank you, Brandon.
Nikhil, maybe just to start off, for investors new to the story, can you just give an overview of ANI today?
Sure. Good afternoon, everybody, and thank you for being here and joining us. 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 assets with durability and growth. Our lead asset, Purified Cortrophin Gel, is approved across multiple indications, 20 plus, of which we focus on six or seven. It is a tough drug to genericize. We have IP that goes into 2043. Most importantly, we have a significant unmet medical need, which a large addressable patient population that we are just scratching the surface on in terms of addressing. Similarly, ILUVIEN is an intravitreal implant that is made of fluocinolone acetonide. It is 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. 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 is 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. We are able to invest about 10% of sales into our generics business into R&D and deliver 10 to 15 new launches that drives the success of our generics business.
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. I do want to start on your lead asset, Cortrophin Gel. Beyond just quarterly cadence, what is ultimately going to determine the size of the Cortrophin franchise over the next three to five years?
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 surface proteins called melanocortin receptors, and so it 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.
It's really a late-line treatment. We believe the addressable market across indications is approximately 1 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 we take acute gouty arthritis flares, there are 10 million patients roughly that have acute gouty arthritis flares. Many of them have flares that resolve on their own. Then there's a number of them that take more oral treatments such as prednisone, colchicine, et cetera, and have their flares resolve. There's a small subset of patients that have, those flares are that bad that they need injectable treatments to have the flares resolve. And that 285,000 is what we consider as our addressable market. So not the 10 million, but 285,000.
If you replicate this analysis across our leading indications, then that number adds up to about 1 million patients. So going back to your question, which is beyond the quarterly cadence, what is really the driver of growth in this market is really the unmet need of these 1 million patients, that the addressable market and us, our ability to reach these patients, and service them. And serve them, sorry.
Fantastic. If we focus just on 2026 alone-
Sure
You did revise guidance. Can you just walk us through the expectations that changed and then the expectations for the back half of the year?
Sure. When we started the year, our initial guidance was on $540 million to $575 million. in Q1, we had a headwind with insurance reverifications where there was a large number of patients that needed insurance reverification, and that was exacerbated further by weather-related delays. 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.
When we looked at our Q2 earnings, when you add Q1 and Q2, about $192 million, we looked at what is 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. That is why we adjusted the guidance down 5%, from $540 million to $575 million, to $520 million to $540 million.
Fantastic. That revised guidance, obviously, there is still tremendous growth in the back half of the year, especially in the fourth quarter. 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 half of the year, but in particular, that fourth quarter sort of bump up?
Sure. If I think of Cortrophin, and you divide Cortrophin into existing specialties, and then the gout expansion. So we had about 120 reps walking into 2026, and they covered our existing specialties, which is rheumatology, nephrology, neurology, ophthalmology, pulmonology. When you look at 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 2025, and that's 45% growth. That momentum from the existing specialties will continue in the back half. When you think of Q4, the first input is that in Q3 and Q4, the $117.1 million will grow in the back half, quarter-on-quarter. That's all largely from existing specialties.
We did a 50% expansion of our sales force by adding 60 new reps for acute gouty 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. Gout was already 18% of our volume, and then we had the success in the pilots and we did this expansion. That expansion, we've seen very strong indicators of demand. All of our reps that were brought on board in May and June 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.
Which are largely in line with what we had expected it to be and what we had seen in the pilot. 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. 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. 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.
That impact getting amplified in Q4 when they've had three to six months under the belt. Third is your typical Q4 dynamics, where there's a higher volume prescribed because prescribers are trying to get patients on extra drug or getting patients drug before their insurance resets, as well as channel dynamics that are typical for any company going into Q4. That's what gives us confidence on the back half expansion.
Fantastic. Just drilling down a little bit more on that acute gouty arthritis expansion. As you mentioned, very encouraging early metrics, right? What will tell you that that launch has progressed from successful initial adoption to sustainable physician utilization and part of their practice? Is it those refills you mentioned or other metrics as well?
Right. First up, 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. What are those metrics? I think there are two levels. One is continued demand generation, right, which is basically prescribers using it. Using it for more patients that they believe are appropriate 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 sales force performance. If you think of 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? We've been able to scale up that impact. So that's on demand generation.
Just being able to convert those patients onto new patient starts and dispensed volume, then just hitting the conversion metrics that we have in place. I think both of those getting to Obviously we've done multiple expansions, right? This is our third or fourth major expansion. Are they tracking on the trajectory of, which they are right now, on the trajectory of conversion and demand generation as the territories get mature and the reps get more time under their belt.
Okay. 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 that territory? Is it repeat treatments, subsequent flares? How should we think about that?
Sure. Cortrophin is not a disease-modifying therapy, right? It is for use for alleviation of symptoms related to flares and exacerbation. As a result, the patients that are prescribed Cortrophin and for whom Cortrophin works, those patients we see typically come back, and that is why you have refills, when the flares come back. That is 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. That just goes back to the addressable patient population, right? There is 285,000 patients. We are not reaching all those new patients with the 60% expansion, but we are 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 starts and new cases initiated. Yeah.
Okay. We have talked a lot about gout, but I do want to just take a step back to the historical or existing Cortrophin specialties, right?
Sure.
Those look like they are continuing to grow as well. Can you just talk about how much runaway of growth remains in the specialties outside of gout?
Sure. Yeah. A great question. You remember I talked about 1 million patients and about 285,000 being the TAM for acute gouty arthritis flares. But for the other specialties, the ones that we focus on, the key indications, existing specialties, it is 750,000 patients. Again, we are scratching the surface or in very early days in terms of number of patients served. So the addressable market there is large and reaching those patients, and there is significant opportunity. As I said, in the first half, we already saw a 45% growth over the prior year with the folks that were already in the building. Then just continuing with that momentum as we expand and reach more patients with the existing specialties. You are also seeing this, again, this is about market growth. Both us and the competitor are trying to reach more patients and reach new prescribers.
Even before the gout expansion, over half of our prescribers are folks that were naive to ACTH. That continues to give us confidence that we can reach more prescribers and reach more patients as we address the unmet needs of these 750,000 patients in our addressable market.
Okay. You touched on that, and I do want to just dig down. 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?
Sure. We've been investing both in generating clinical and pre-clinical data that can support clinicians in the use of ACTH. We've done a bunch of work in the pre-clinical evidence showing the mechanism of action and showing a differentiated mechanism of action. That's where we can talk about the engaging with all five melanocortin receptors, at least on an in vitro basis. We're doing a phase IV study in acute gouty arthritis flares, where we're comparing the 40 IU and the 80 IU in time to onset of action. Generating with the hope with that phase IV data is also being able to engage with the ACR and the other guideline committee to see if ACTH can be added into the ACR guidelines. 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, further support the use of ACTH for the appropriate patients.
Yeah. Fantastic. I am just going to move on to ILUVIEN.
Sure.
Because I do not want to not touch on that.
Yeah.
What do you think needs to change for ILUVIEN to become a more meaningful growth driver for ANI?
Look, I think we have the NEW DAY study, phase IV study released last year. Earlier this year, we initiated, oh, sorry, we released the six-month data for SYNCHRONICITY for use of ILUVIEN in NIU-PS. We have the full data release coming at a conference in Q4. We believe that will further support the use of ILUVIEN and give real new safety and efficacy data, and different use cases to the clinicians to support, especially retina specialists, to support their further use of ILUVIEN. That combined with our continued push of commercial execution and access, improving the access with the challenges that are there on the co-pay funding side, and looking at specialty pharmacy distribution as an alternative for the right patients. Those are the mix of sort of initiatives that will help drive success of ILUVIEN.
Okay. 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. As we move forward into 2027, you have this tremendous top-line growth ahead of you, but how do you balance investment into the company, whether that be in different factors of your business, against driving operating leverage?
Yeah, I think we have balanced driving growth and profitability as we have grown the company. Even in 2026, our guidance has the top line growing 26%, the bottom adjusted non-GAAP EBITDA growing 27%, even in a year where we are spending an incremental $50 million in OpEx for the gout expansion. So we are looking to balance growth and profitability. In 2027, we will see operating leverage from the investments we made in the $50 million investment we made in the additional gout sales force. We will get a lot more sales in 2027 from the same investment, and it is not just the six-month versus the 12-month of the gout sales force, but also a much higher quarterly run rate. So we are absolutely trying to balance both growth and profitability.
Okay. Fantastic. If we do take a step back and circle three, five years ahead, what do these investments look like, and what does the company look like if we are sitting here three, five years from now?
Yeah. We are looking to build a leading rare disease company. Cortrophin is an important chapter, but will be chapter one of that story, and there will be other commercial products that we will add to the commercial rare disease portfolio. At some point, after two or three acquisitions, we may start thinking about clinical bets and building the development capability. Then as we are 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 are also very pleased and happy with.
Fantastic. Nikhil, Stephen, thanks very much for joining me.
Thank you. Thank you, Brandon. Thanks, Brandon. Thank you.