Business Overview
ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) is a diversified biopharmaceutical company serving patients in need by developing, manufacturing, and marketing branded and generic prescription pharmaceuticals, including for diseases with high unmet medical need. The company is focused on delivering growth by scaling up the Rare Disease business through the launch of its lead asset, Cortrophin Gel, strengthening its generics business with enhanced development capability, innovation in established brands, and leveraging its U.S.-based manufacturing capabilities.ANI operates three pharmaceutical manufacturing facilities, two located in Baudette, Minnesota and one in East Windsor, New Jersey, which are capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products. The company has ceased operations at its subsidiary in Oakville, Ontario, Canada as of March 31, 2023 as part of ongoing initiatives to capture operational synergies following the acquisition of Novitium Pharma LLC in November 2021.
Rare Disease Segment
ANI's lead rare disease asset, Purified Cortrophin® Gel (Repository Corticotropin Injection USP), was approved by the FDA in October 2021 for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis and rheumatoid arthritis, in addition to excess urinary protein due to nephrotic syndrome. In the first quarter of 2024, Cortrophin Gel generated $36.9 million in revenue, a 126% increase year-over-year. The company continues to invest in its Rare Disease platform, including expanding its sales force into new specialty areas such as pulmonology and ophthalmology, and launching a new 1-mL vial of Cortrophin Gel for the treatment of acute gouty arthritis flares. Management believes Cortrophin Gel remains on a strong multi-year growth trajectory, driven by increased market penetration within core and new indications as well as further expansion of the total ACTH category.Generics Segment
ANI's generics business delivered another solid quarter, with revenue of $70.2 million, an increase of 10% year-over-year. The company leverages its high-performance R&D team, operational excellence, and U.S.-based manufacturing footprint to launch new products, including a competitive generic therapy product with 180-day exclusivity during the first quarter. ANI remains a top 15 manufacturer in number of product approvals and is focused on niche lower competition opportunities such as injectables, Paragraph IV, and competitive generic therapy filings.Established Brands Segment
ANI's established brands business continues to address patient needs with reliability of supply, a unique set of commercial capabilities, and opportunistic business development to expand the portfolio. This high gross margin, low working capital, and strong cash flow generation business complements the company's growth initiatives in rare disease and generics.Financials
For the full year 2023, ANI reported annual net income of $18.8 million, annual revenue of $486.8 million, annual operating cash flow of $119.0 million, and annual free cash flow of $100.4 million.In the first quarter of 2024, the company generated total revenues of $137.4 million, a 29% increase compared to the prior year period. Rare disease revenues, which consist entirely of Cortrophin Gel, were $36.9 million, up 126% year-over-year. Generics revenues were $70.2 million, an increase of 10% compared to the prior year quarter. Established brands and other revenues were $30.3 million, up 13% year-over-year.
Non-GAAP gross margin for the first quarter was 64.5%, a decrease of approximately 145 basis points from the prior year period, primarily driven by product mix. Research and development expenses increased 77% to $10.5 million, while selling, general and administrative expenses increased 32% to $48.0 million, due to increased employment-related costs and continued investment in the company's rare disease sales and marketing infrastructure.
During the first quarter, ANI completed the sale of its Oakville, Ontario, Canada manufacturing facility for $14.2 million and recognized a $5.3 million gain. The company also recorded a $9.7 million gain on its investment in CG Oncology common stock following CG Oncology's initial public offering in January 2024. Both the gain on the sale of the Oakville facility and the gain on the CG Oncology equity investment have been excluded from the calculation of the company's non-GAAP financial measures.
Net income available to common shareholders for the first quarter of 2024 was $17.8 million, compared to $1.0 million in the prior year period. Diluted GAAP earnings per share was $0.82, compared to $0.06 in the prior year quarter. On an adjusted non-GAAP basis, diluted earnings per share was $1.21, compared to $1.17 in the prior year period. Adjusted non-GAAP EBITDA for the first quarter was $37.6 million, an increase of 14% over the prior year period.