BAUDETTE, Minn., Nov. 6, 2018 /PRNewswire/ --
For the third quarter 2018:
- Record net revenues of $50.7
million, an increase of 5% as compared to the same period in
2017
- GAAP net income of $5.0
million and diluted GAAP earnings per share of $0.42
- Adjusted non-GAAP EBITDA of $21.4
million
- Adjusted non-GAAP diluted earnings per share of $1.29
ANI Pharmaceuticals, Inc. ("ANI") (NASDAQ: ANIP) today
reported its financial results for the three and nine months ended
September 30, 2018 and reaffirmed its
2018 financial guidance. The Company will host its earnings
conference call this morning, November 6,
2018, at 10:30 AM ET.
Investors and other interested parties can join the call by dialing
(866) 776-8875. The conference ID is 3193426.
Financial Summary
(in thousands,
except per share data)
|
|
Q3
2018
|
|
Q3
2017
|
|
YTD
2018
|
|
YTD
2017
|
Net
revenues
|
|
$ 50,703
|
|
$ 48,164
|
|
$ 144,454
|
|
$ 129,556
|
Net
income
|
|
$
5,037
|
|
$
4,720
|
|
$
10,064
|
|
$
8,553
|
GAAP earnings per
diluted share
|
|
$
0.42
|
|
$
0.40
|
|
$
0.85
|
|
$
0.73
|
Adjusted non-GAAP
EBITDA(a)
|
|
$ 21,429
|
|
$ 20,662
|
|
$
62,217
|
|
$
54,503
|
Adjusted non-GAAP
diluted earnings per share(b)
|
|
$
1.29
|
|
$
1.11
|
|
$
3.74
|
|
$
2.83
|
|
(a) See
Table 3 for US GAAP reconciliation.
|
(b) See
Table 4 for US GAAP reconciliation.
|
Arthur S. Przybyl, President and
CEO, stated,
"ANI had a strong third quarter, generating record net revenues.
Our year-to-date results include record net revenues, an increase
of 11% over the prior year period, record adjusted non-GAAP EBITDA,
an increase of 14% over the prior year period, and record adjusted
non-GAAP diluted earnings per share, an increase of 32% over the
prior year period. Our balance sheet and cash flows remain robust
and we continue to seek acquisitive opportunities to augment our
internal growth.
"Since our last earnings release we have launched three new
generic products: Cholestyramine, and authorized generics of
Brethine® and Atacand HCT®. This year we have launched seven
generic products, increasing our total generic drug portfolio to 31
products.
"Recently, we launched two brand products and now have a
portfolio of 11 brand products sold under the ANI label. In
September, we filed our prior approval supplement with the FDA for
Vancocin® Oral Solution and our work continues to progress on
re-commercializing Cortrophin® and filing the supplemental NDA in
the first quarter of 2020.
"Finally, in August, ANI acquired Wellspring Pharma Services to
expand our contract manufacturing and development business. We are
currently integrating that business and look forward to making
further use of the manufacturing facility to advance work on our
pipeline products."
ANI Reaffirms Guidance for the Full Year 2018
ANI's estimates are based upon actual results for the nine
months ending September 30, 2018 and
projected results for the remaining three months of the year. ANI's
full year 2018 guidance reflects management's current assumptions
regarding customer relationships, product pricing, prescription
trends, competition, inventory levels, cost of sales, operating
costs, timing of research and development spend, taxes, and the
anticipated timing of future product launches, integration and
contribution of recent acquisitions and other key events. For the
twelve months ending December 31,
2018, ANI is providing guidance on net revenue, adjusted
non-GAAP EBITDA and adjusted non-GAAP diluted earnings per
share.
The following table summarizes 2018 guidance:
($ in millions except per share data)
|
2018
Guidance
|
|
|
Net
Revenues
|
$195 to
$205
|
|
|
Adjusted non-GAAP
EBITDA
|
$82 to $88
|
|
|
Adjusted non-GAAP
diluted earnings per share
|
$4.80 to
$5.27
|
Generic Pharmaceutical Products
Third Quarter Revenue Results and Update
Revenues from sales of generic pharmaceuticals decreased 1%, to
$30.3 million from $30.5 million in the prior period, primarily due
to volume decreases for Fenofibrate, EEMT, and Nilutamide, tempered
by the second quarter 2018 launch of Ezetimibe-Simvastatin. To date
in 2018, ANI has launched seven generic products: Candesartan
Hydrochlorothiazide (the authorized generic of Atacand HCT®),
Terbutaline Sulfate (the authorized generic of Brethine®), Morphine
Sulfate Oral Solution, Cholestyramine for Oral Suspension,
Ezetimibe-Simvastatin, Desipramine, and Felbamate, increasing its
generic commercialized product portfolio to a total of 31
products.
Key Generic Pipeline Products
Product
|
Reference
Drug
|
Required
Filing
|
Timing
|
Total Annual
Market(c)
|
Methylphenidate ER
Tablets
|
Concerta®
|
None
(approved)
|
Launch Q1
2019
|
$1,300M
|
Aspirin/Dipyridamole
ER Capsules
|
Aggrenox®
|
None
(approved)
|
Launch no later than
October 1, 2019
|
$
176M
|
Undisclosed
|
Undisclosed
|
ANDA filed – priority
review granted
|
GDUFA date: April
2019
|
$
46M
|
|
(c) Based
on data from IQVIA
|
Branded Pharmaceutical Products
Third Quarter Revenue Results and Update
Revenues from sales of branded pharmaceuticals decreased 7%, to
$14.6 million from $15.7 million in the prior period, primarily due
to lower unit sales and price of Inderal® LA and lower unit sales
of Vancocin®, tempered by sales of Casodex® and Arimidex®, which
were launched in July 2018, as well
as sales of Inderal® XL and InnoPran XL®, both of which were
acquired in the first quarter of 2017 and which were re-launched
under the ANI label in the first quarter of 2018. In October, ANI
launched two additional branded products in the ANI label, Atacand®
and Atacand HCT®, increasing the number of branded products sold
under the ANI label to eleven.
Key Brand Pipeline Products
Product
|
Required
Filing
|
Filing
Date
|
Total Annual
Market(d)
|
Vancocin® Oral
Solution
|
PAS
|
Filed
September
2018
|
$ 450M
|
Cortrophin®
Gel
|
sNDA
|
By Q1 2020
|
$1,140M
|
|
(d) Based
on data from IQVIA
|
Vancocin® Oral Solution Update
ANI is currently advancing a commercialization effort for
Vancocin® oral solution. ANI filed a prior approval supplement
("PAS") in September 2018. This
product will be manufactured at ANI's site in Baudette, Minnesota and will compete in a
market that currently exceeds $450
million annually.
Cortrophin® Gel Re-commercialization Update
In the third quarter of 2018, ANI continued commercial scale
manufacturing of Corticotropin API. Thus far, commercial scale
Corticotropin API appears to be consistent with the pilot scale
batches previously manufactured, and moreover, consistent with
legacy API batches that had been manufactured previously. The
Company is on track to initiate API process validation, viral
clearance validation, and API registration batch manufacturing in
the first quarter of 2019.
ANI has finalized development of all API and drug product
analytical methods to be used to support the API characterization
package. Analytical methods to be used for batch release and
stability have also been developed and will be validated prior to
initiation of process validation and registration batch
manufacturing, specifically by the first quarter of 2019 for API
and the second quarter of 2019 for drug product.
The Company continued to manufacture Cortrophin® Gel finished
dose drug product, which has been placed on stability. Commercial
scale drug product manufacturing activities are scheduled to begin
in the fourth quarter of 2018, utilizing API that was also
manufactured at commercial scale. ANI is on track to initiate media
fill simulations in the first quarter of 2019 and drug product
process validation and registration batch manufacturing in the
second quarter of 2019.
ANI is on track to file a supplemental NDA by the first quarter
of 2020.
For further details, please see ANI's Cortrophin® Gel
Re-commercialization Milestone Update in Table 5.
Contract Manufacturing
Third Quarter Revenue Results and Update
Contract manufacturing revenue increased by 55% to $2.8 million from $1.8
million in the prior year period, primarily due to the
impact of contract manufacturing revenue from our Canadian
subsidiary, ANI Pharmaceuticals Canada Inc. ("ANI Canada"). Through
our ANI Canada subsidiary, we acquired WellSpring Pharma Services
Inc. ("WellSpring"), a Canadian company located in Oakville, Ontario that performs contract
development and manufacturing of pharmaceutical products, in
August 2018. With an employee base of
about 100, ANI Pharmaceuticals Canada Inc. (formerly WellSpring) is
a well-established contract development and manufacturing facility
with capabilities in solid oral, semi-solids, and liquids that
operates out of a 100,000 square foot site that ANI acquired as
part of the transaction. ANI Canada has a diverse customer
base, focused on both brand and generic drug products. The site
manufactures drug product for both the U.S. and Canadian
prescription drug markets and has substantial capacity.
Royalty and Other Income
Third Quarter Revenue Result and Update
Royalty and other income increased to $3.0 million from $0.1 million, primarily due to the royalties
received on sales of Atacand® and Atacand HCT®. These product
royalties will decrease as a direct result of ANI transferring
these products into the ANI label branded product. In addition,
during the three months ended September 30,
2018, we recognized $0.5
million of royalties from sales and milestones related to
Gilead's Yescarta® product, as further described below. In
addition, the three months ended September
30, 2018 include the impact of product development services
and laboratory services revenue from our ANI Canada subsidiary.
Key Royalty Product: Yescarta®
ANI is entitled to a percentage of global Yescarta® net sales as
well as a portion of certain product milestones, such as the recent
positive opinion issued by the European Medicines Agency ("EMA")
Committee for Medicinal Products for Human Use ("CHMP").
Third Quarter Results
Net
Revenues
(in
thousands)
|
|
Three Months
Ended
September 30,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
%
Change
|
Generic
pharmaceutical products
|
|
$
|
30,287
|
|
$
|
30,546
|
|
$
|
(259)
|
|
(1)%
|
Branded
pharmaceutical products
|
|
|
14,589
|
|
|
15,688
|
|
|
(1,099)
|
|
(7)%
|
Contract
manufacturing
|
|
|
2,826
|
|
|
1,829
|
|
|
997
|
|
55%
|
Royalty and other
income
|
|
|
3,001
|
|
|
101
|
|
|
2,900
|
|
NM(1)
|
Total net
revenues
|
|
$
|
50,703
|
|
$
|
48,164
|
|
$
|
2,539
|
|
5%
|
For the three months ended September 30,
2018, ANI reported net revenues of $50.7 million, an increase of 5% from
$48.2 million in the prior year
period, due to the following factors:
- Revenues from sales of generic pharmaceuticals decreased 1%, to
$30.3 million from $30.5 million in the prior period, primarily due
to volume decreases for Fenofibrate, EEMT, and Nilutamide, tempered
by the second quarter 2018 launch of Ezetimibe-Simvastatin.
- Revenues from sales of branded pharmaceuticals decreased 7%, to
$14.6 million from $15.7 million in the prior period, primarily due
to lower unit sales and price of Inderal® LA and lower unit sales
of Vancocin®, tempered by sales of Casodex® and Arimidex®, which
were launched in July 2018, as well
as sales of Inderal® XL and InnoPran XL®, both of which were
acquired in the first quarter of 2017 and re-launched under the ANI
label in the first quarter of 2018.
- Contract manufacturing revenue increased by 55% to $2.8 million from $1.8
million in the prior year period, primarily due to the
results of our ANI Canada subsidiary.
- Royalty and other income increased to $3.0 million from $0.1 million, due to the royalties received on
sales of Atacand®, Atacand HCT®, royalties from Yescarta® sales and
milestones, and the impact of product development services and
laboratory services revenue from our ANI Canada subsidiary.
Operating expenses increased to $40.6
million for the three months ended September 30, 2018, from $38.8 million in the prior year period. The
increase was primarily due to a $3.7
million increase in selling, general, and administrative as
compared with the prior period, as a result of increases in
personnel and related costs and $0.9
million of costs associated with the WellSpring acquisition
and integration. Research and development expense increased by
$2.0 million as compared with the
prior period, primarily as a result of increased work on development projects,
primarily the Cortrophin® Gel re-commercialization project and work
on the ANDAs acquired in the asset purchase agreement with
Impax/Amneal. In addition, depreciation and amortization increased
by $1.4 million due to the
amortization of the product rights for Atacand®, Atacand HCT®,
Arimidex®, and Casodex®, which were acquired in December 2017. These increases were partially
offset by the $5.5 million decrease
in cost of sales, due to decreased sales of products subject to
profit-sharing arrangements, as well as the $2.8 million impact in 2017 of costs of sales
related to the excess of fair value over cost on Inderal® XL and
InnoPran XL® inventory, the impact of which did not continue in the
third quarter of 2018.
Cost of sales as a percentage of net revenues decreased
to 31% during the three months ended September 30, 2018, from 38% during same period
in 2017, excluding the $44 thousand
of net inventory step-up costs relating to contract manufacturing
sales in our ANI Canada entity in the third quarter of 2018 and
$2.8 million of net inventory step-up
costs related to sales of Inderal® XL, InnoPran XL®, and Inderal®
LA in the third quarter of 2017. The decrease was primarily due to
increased royalty income and lower
sales of products subject to profit-sharing arrangements.
Net income was $5.0 million for
the three months ended September 30,
2018, as compared to net income of $4.7 million in the prior year period. The
effective tax rate for the three months ended September 30, 2018 was 21%.
Diluted earnings per share for the three months ended
September 30, 2018 was $0.42, based on 11,804 thousand diluted shares
outstanding, as compared to diluted earnings per share of
$0.40 in the prior year period.
Adjusted non-GAAP diluted earnings per share was $1.29, as compared to adjusted non-GAAP diluted
earnings per share of $1.11 in the
prior year period. For a reconciliation of adjusted non-GAAP
diluted earnings per share to the most directly comparable GAAP
financial measure, please see Table 4.
Results for Nine Months Ended September 30, 2018
Net
Revenues
(in
thousands)
|
|
Nine Months
Ended
September
30,
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
%
Change
|
Generic
pharmaceutical products
|
|
$
|
83,716
|
|
$
|
88,608
|
|
$
|
(4,892)
|
|
(6)%
|
Branded
pharmaceutical products
|
|
|
41,714
|
|
|
35,398
|
|
|
6,316
|
|
18%
|
Contract
manufacturing
|
|
|
5,450
|
|
|
5,151
|
|
|
299
|
|
6%
|
Royalty and other
income
|
|
|
13,574
|
|
|
399
|
|
|
13,175
|
|
NM(1)
|
Total net
revenues
|
|
$
|
144,454
|
|
$
|
129,556
|
|
$
|
14,898
|
|
11%
|
For the nine months ended September 30,
2018, ANI reported net revenues of $144.5 million, an increase of 11%
from $129.6 million in the prior year
period, due to the following factors:
- Revenues from sales of generic pharmaceuticals decreased 6%, to
$83.7 million from $88.6 million in the prior period, primarily due
to volume decreases for Fenofibrate, EEMT, and Nilutamide, as well
as sales decreases for Propranolol ER driven by price, tempered by
the second quarter 2018 launch of Ezetimibe-Simvastatin and the
second quarter 2017 launch of Diphenoxylate Hydrochloride and
Atropine Sulfate.
- Revenues from sales of branded pharmaceuticals increased 18%,
to $41.7 million from $35.4 million in the prior period, primarily due
to sales of Inderal® XL and InnoPran XL®, both of which were
acquired in the first quarter of 2017, and which were re-launched
under our label in the first quarter of 2018, as well as sales of
Casodex® and Arimidex®, which were launched in July 2018, tempered by to lower unit sales of
Inderal® LA and Vancocin®.
- Contract manufacturing revenue increased by 6% to $5.5 million from $5.2
million in the prior year period, primarily due to the
impact of contract manufacturing sales from our ANI Canada
subsidiary, partially offset by the timing of orders.
- Royalty and other income increased to $13.6 million from $0.4 million, primarily due to the royalties
received on sales of Atacand®, Atacand HCT®, Arimidex®, and
Casodex®, as well as royalties from Yescarta® sales and
milestones.
Operating expenses increased to $120.5
million for the nine months ended September 30, 2018, from $108.6 million in the prior year period. The
increase was primarily due to a $8.0
million increase in selling, general, and administrative as
compared with the prior period, as a result of increases in
personnel and related costs and $1.3
million of costs associated with the WellSpring acquisition
and integration. Research and development expense increased by
$5.5 million as compared with the
prior period, primarily as a result of $1.3
million of in-process research and development, which was
recognized as research and development expense in relation to the
asset acquisition from Impax/Amneal, as well as increased work on development
projects, primarily the Cortrophin® Gel re-commercialization
project and work on the ANDAs acquired in the asset purchase
agreement with Impax/Amneal. In addition, depreciation and
amortization increased by $4.2
million due primarily to the amortization of the product
rights for Atacand®, Atacand HCT®, Arimidex®, and Casodex®, which
were acquired in December 2017.
Excluding the $5.7 million of net
inventory step-up, primarily related to the sales and write off
Inderal® XL and InnoPran XL® in the nine months ended September 30, 2018 and $7.5 million of net inventory step-up costs
related to sales of Inderal® XL, InnoPran XL®, and Inderal® LA in
the nine months ended September 30,
2017, cost of sales as a percentage of net revenues
decreased to 33% during the nine months ended September 30, 2018, from 39% during same period
in 2017, primarily due to increased royalty revenues, change in
product mix towards higher-margin brand products, and lower sales
of products subject to profit-sharing arrangements.
Net income was $10.1 million for
the nine months ended September 30,
2018, as compared to net income of $8.6 million in the prior year period. The
effective tax rate for the nine months ended September 30, 2018 was 21%.
Diluted earnings per share for the nine months ended
September 30, 2018 was $0.85, based on 11,767 thousand diluted shares
outstanding, as compared to diluted earnings per share of
$0.73 in the prior year period.
Adjusted non-GAAP diluted earnings per share was $3.74, as compared to adjusted non-GAAP diluted
earnings per share of $2.83 in the
prior year period. For a reconciliation of adjusted non-GAAP
diluted earnings per share to the most directly comparable GAAP
financial measure, please see Table 4.
Selected Balance Sheet Data
(in thousands)
|
September 30,
2018
|
December 31,
2017
|
Cash
|
$
44,136
|
$
31,444
|
Accounts receivable,
net
|
$
67,647
|
$
58,788
|
Inventory,
net
|
$
40,006
|
$
37,727
|
Current
assets
|
$
156,793
|
$
131,605
|
Current
liabilities
|
$
46,902
|
$
39,228
|
Non-current
debt
|
$
200,076
|
$
198,154
|
ANI generated $39.8 million of
positive cash flows from operations in the nine months ended
September 30, 2018. In December 2017, ANI entered into a credit
agreement with Citizens Bank, N.A. that included a $75 million term loan and a $50 million line of credit. The $75 million term loan was used to pay down ANI's
former $25.0 million line of credit
and to purchase from AstraZeneca AB and AstraZeneca UK Limited the
right, title, and interest in the NDAs and the U.S. rights to
market Atacand®, Atacand HCT®, Arimidex®, and Casodex®, for
$46.5 million in cash. The
$50 million line of credit currently
remains undrawn. In April 2018, ANI
purchased from IDT Australia, Limited the ANDAs for 23
previously-marketed generic drug products and API for four of the
acquired products for $2.7 million in
cash and a single-digit royalty on net profits from sales of one of
the products. In May 2018, ANI
purchased from Impax/Amneal the approved ANDAs for three
previously-commercialized generic drug products, the approved ANDAs
for two generic drug products that have not yet been
commercialized, the development package for one generic drug
product, a license, supply, and distribution agreement for a
generic drug product with an ANDA that is pending approval, and
certain manufacturing equipment required to manufacture one of the
products, for $2.3 million in cash.
In August 2018, ANI acquired
WellSpring. As a result of the transaction, ANI acquired
WellSpring's pharmaceutical manufacturing facility, laboratory, and
offices, current book of commercial business, as well as an
organized workforce for a purchase price of $18 million, subject to customary adjustments.
Subject to further adjustments, estimated consideration was
$17.3 million, paid with cash on
hand.
ANI Product Development Pipeline
ANI's pipeline consists of 75
products, addressing a total annual market size of $4.5 billion, based on data from IQVIA. Of
these 75 products, 70 were acquired
and of these acquired products, ANI expects that 54 can be
commercialized based on either CBE-30s or prior approval
supplements filed with the FDA.
Non-GAAP Financial Measures
The Company's fiscal 2018 guidance for adjusted non-GAAP EBITDA
and adjusted non-GAAP diluted earnings per share is not reconciled
to the most comparable GAAP measure. This is due to the inherent
difficulty of forecasting the timing or amount of items that would
be included in a reconciliation to the most directly comparable
forward-looking GAAP financial measures. Because a reconciliation
is not available without unreasonable effort, it is not included in
this release.
Adjusted non-GAAP EBITDA
ANI's management considers adjusted non-GAAP EBITDA to be an
important financial indicator of ANI's operating performance,
providing investors and analysts with a useful measure of operating
results unaffected by non-cash stock-based compensation and
differences in capital structures, tax structures, capital
investment cycles, ages of related assets, and compensation
structures among otherwise comparable companies. Management uses
adjusted non-GAAP EBITDA when analyzing Company performance.
Adjusted non-GAAP EBITDA is defined as net income/(loss),
excluding tax expense, interest expense, depreciation,
amortization, the excess of fair value over cost of acquired
inventory, stock-based compensation expense, expense from acquired
in-process research and development, transaction and integration
expenses, and other income / expense. Adjusted non-GAAP EBITDA
should be considered in addition to, but not in lieu of, net income
or loss reported under GAAP. A reconciliation of adjusted non-GAAP
EBITDA to the most directly comparable GAAP financial measure is
provided in Table 3.
Adjusted non-GAAP Net Income
ANI's management considers adjusted non-GAAP net income to be an
important financial indicator of ANI's operating performance,
providing investors and analysts with a useful measure of operating
results unaffected by purchase accounting adjustments, non-cash
stock-based compensation, non-cash interest expense, depreciation
and amortization, and non-cash impairment charges. Management uses
adjusted non-GAAP net income when analyzing Company
performance.
Adjusted non-GAAP net income is defined as net income/(loss),
plus the excess of fair value over cost of acquired inventory,
stock-based compensation expense, transaction and integration
expenses, non-cash interest expense, depreciation and amortization
expense, expense from acquired in-process research and development,
and non-cash impairment charges, less the tax impact of these
adjustments calculated using an estimated statutory tax rate.
Management will continually analyze this metric and may include
additional adjustments in the calculation in order to provide
further understanding of ANI's results. Adjusted non-GAAP net
income should be considered in addition to, but not in lieu of, net
income reported under GAAP. A reconciliation of adjusted non-GAAP
net income to the most directly comparable GAAP financial measure
is provided in Table 4.
Adjusted non-GAAP Diluted Earnings per Share
ANI's management considers adjusted non-GAAP diluted earnings
per share to be an important financial indicator of ANI's operating
performance, providing investors and analysts with a useful measure
of operating results unaffected by purchase accounting adjustments,
non-cash stock-based compensation, non-cash interest expense,
depreciation and amortization, and non-cash impairment charges.
Management uses adjusted non-GAAP diluted earnings per share
when analyzing Company performance.
Adjusted non-GAAP diluted earnings per share is defined as
adjusted non-GAAP net income, as defined above, divided by the
diluted weighted average shares outstanding during the period.
Management will continually analyze this metric and may include
additional adjustments in the calculation in order to provide
further understanding of ANI's results. Adjusted non-GAAP diluted
earnings per share should be considered in addition to, but not in
lieu of, diluted earnings or loss per share reported under GAAP. A
reconciliation of adjusted non-GAAP diluted earnings per share to
the most directly comparable GAAP financial measure is provided in
Table 4.
About ANI
ANI Pharmaceuticals, Inc. (the "Company" or "ANI") is an
integrated specialty pharmaceutical company developing,
manufacturing, and marketing high quality branded and generic
prescription pharmaceuticals. The Company's targeted areas of
product development currently include controlled substances,
oncolytics (anti-cancers), hormones and steroids, and complex
formulations involving extended release and combination products.
For more information, please visit the Company's website
www.anipharmaceuticals.com.
Forward-Looking Statements
To the extent any statements made in this release deal with
information that is not historical, these are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited
to, statements about price increases, the Company's future
operations, products financial position, operating results and
prospects, the Company's pipeline or potential markets therefor,
and other statements that are not historical in nature,
particularly those that utilize terminology such as "anticipates,"
"will," "expects," "plans," "potential," "future," "believes,"
"intends," "continue," other words of similar meaning, derivations
of such words and the use of future dates.
Uncertainties and risks may cause the Company's actual results
to be materially different than those expressed in or implied by
such forward-looking statements. Uncertainties and risks include,
but are not limited to, the risk that the Company may face with
respect to importing raw materials; increased competition;
acquisitions; contract manufacturing arrangements; delays or
failure in obtaining product approvals from the U.S. Food and Drug
Administration; general business and economic conditions; market
trends; regulatory environment; products development; regulatory
and other approvals; and marketing.
More detailed information on these and additional factors that
could affect the Company's actual results are described in the
Company's filings with the Securities and Exchange Commission,
including its most recent Annual Report on Form 10-K and quarterly
reports on Form 10-Q, as well as its proxy statement. All
forward-looking statements in this news release speak only as of
the date of this news release and are based on the Company's
current beliefs, assumptions, and expectations. The Company
undertakes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise.
For more information about ANI, please contact:
Investor Relations
IR@anipharmaceuticals.com
ANI
Pharmaceuticals, Inc. and Subsidiaries
|
Table 1: US GAAP
Income Statement
|
(unaudited, in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net
Revenues
|
|
$50,703
|
|
$48,164
|
|
$144,454
|
|
$129,556
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
Cost of sales
(excl. depreciation and
amortization)
|
|
15,605
|
|
21,078
|
|
52,891
|
|
58,586
|
Research and
development
|
|
4,667
|
|
2,634
|
|
11,906
|
|
6,419
|
Selling, general, and
administrative
|
|
11,769
|
|
8,022
|
|
30,687
|
|
22,695
|
Depreciation and
amortization
|
|
8,548
|
|
7,099
|
|
25,056
|
|
20,906
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
|
40,589
|
|
38,833
|
|
120,540
|
|
108,606
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
10,114
|
|
9,331
|
|
23,914
|
|
20,950
|
|
|
|
|
|
|
|
|
|
Other Expense,
Net
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(3,768)
|
|
(3,052)
|
|
(11,132)
|
|
(9,009)
|
Other
income/(expense), net
|
|
20
|
|
95
|
|
(71)
|
|
58
|
|
|
|
|
|
|
|
|
|
Income Before
Provision for Income Taxes
|
|
6,366
|
|
6,374
|
|
12,711
|
|
11,999
|
|
|
|
|
|
|
|
|
|
Provision for Income
Taxes
|
|
(1,329)
|
|
(1,654)
|
|
(2,647)
|
|
(3,446)
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
5,037
|
|
$
4,720
|
|
$ 10,064
|
|
$
8,553
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
|
$
0.43
|
|
$
0.41
|
|
$
0.85
|
|
$
0.74
|
Diluted Earnings Per
Share
|
|
$
0.42
|
|
$
0.40
|
|
$
0.85
|
|
$
0.73
|
|
|
|
|
|
|
|
|
|
Basic
Weighted-Average Shares Outstanding
|
|
11,706
|
|
11,553
|
|
11,659
|
|
11,542
|
Diluted
Weighted-Average Shares Outstanding
|
|
11,804
|
|
11,677
|
|
11,767
|
|
11,666
|
ANI
Pharmaceuticals, Inc. and Subsidiaries
|
Table 2: US GAAP
Balance Sheets
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
September
30,
2018
|
|
December
31,
2017
|
Current
Assets
|
|
|
|
Cash and cash equivalents
|
$
44,136
|
|
$
31,144
|
Accounts receivable, net
|
67,647
|
|
58,788
|
Inventories, net
|
40,006
|
|
37,727
|
Prepaid income taxes, net
|
-
|
|
1,162
|
Prepaid expenses and other current assets
|
5,004
|
|
2,784
|
|
|
|
|
Total
Current Assets
|
156,793
|
|
131,605
|
|
|
|
|
Property and
equipment, net
|
37,418
|
|
20,403
|
Restricted
cash
|
5,014
|
|
5,006
|
Deferred tax assets,
net of deferred tax liabilities and valuation allowance
|
25,082
|
|
22,667
|
Intangible assets,
net
|
209,544
|
|
229,790
|
Goodwill
|
4,180
|
|
1,838
|
Other long-term
assets
|
1,412
|
|
829
|
|
|
|
|
Total
Assets
|
$
439,443
|
|
$
412,138
|
|
|
|
|
Current
Liabilities
|
|
|
|
Current component of long-term borrowing, net of deferred financing
costs
|
$
5,692
|
|
$
3,353
|
Accounts payable
|
7,257
|
|
3,630
|
Accrued expenses and other
|
2,818
|
|
1,571
|
Accrued royalties
|
7,455
|
|
12,164
|
Accrued compensation and related expenses
|
2,773
|
|
2,306
|
Current income taxes payable, net
|
318
|
|
-
|
Accrued government rebates
|
9,014
|
|
7,930
|
Returned goods reserve
|
10,840
|
|
8,274
|
Deferred revenue
|
735
|
|
-
|
|
|
|
|
Total
Current Liabilities
|
46,902
|
|
39,228
|
|
|
|
|
Long-term borrowing, net of deferred financing costs and current
borrowing component
|
65,954
|
|
69,946
|
Convertible notes, net of discount and deferred financing
costs
|
134,122
|
|
128,208
|
|
|
|
|
Total
Liabilities
|
246,978
|
|
237,382
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common
stock
|
1
|
|
1
|
Treasury
stock
|
(659)
|
|
(259)
|
Additional paid-in
capital
|
186,532
|
|
179,020
|
Retained
earnings/(accumulated deficit)
|
6,058
|
|
(4,006)
|
Accumulated other
comprehensive income, net of tax
|
533
|
|
-
|
|
|
|
|
Total
Stockholders' Equity
|
192,465
|
|
174,756
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$
439,443
|
|
$
412,138
|
ANI
Pharmaceuticals, Inc. and Subsidiaries
|
Table 3: Adjusted
non-GAAP EBITDA Calculation and US GAAP to Non-GAAP
Reconciliation
|
(unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
5,037
|
|
$
4,720
|
|
$10,064
|
|
$
8,553
|
|
|
|
|
|
|
|
|
|
Add back
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
3,768
|
|
3,052
|
|
11,132
|
|
9,009
|
Other
income/(expense), net
|
|
(20)
|
|
(95)
|
|
71
|
|
(58)
|
Provision for income taxes
|
|
1,329
|
|
1,654
|
|
2,647
|
|
3,446
|
Depreciation and amortization
|
|
8,548
|
|
7,099
|
|
25,056
|
|
20,906
|
|
|
|
|
|
|
|
|
|
Add back
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
1,795
|
|
1,475
|
|
4,954
|
|
4,668
|
Acquired
IPR&D expense
|
|
-
|
|
-
|
|
1,335
|
|
-
|
Excess
of fair value over cost of acquired inventory
|
|
44
|
|
2,757
|
|
5,689
|
|
7,502
|
Transaction and integration expenses
|
|
928
|
|
-
|
|
1,269
|
|
477
|
Adjusted non-GAAP EBITDA
|
|
$21,429
|
|
$20,662
|
|
$62,217
|
|
$54,503
|
ANI
Pharmaceuticals, Inc. and Subsidiaries
|
Table 4: Adjusted
non-GAAP Net Income and Adjusted non-GAAP Diluted Earnings per
Share Reconciliation
|
(unaudited, in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
5,037
|
|
$
4,720
|
|
$ 10,064
|
|
$
8,553
|
|
|
|
|
|
|
|
|
|
Add back
|
|
|
|
|
|
|
|
|
Non-cash interest expense
|
|
1,980
|
|
1,789
|
|
5,839
|
|
5,355
|
Depreciation and amortization expense
|
|
8,548
|
|
7,099
|
|
25,056
|
|
20,906
|
Acquired IPR&D expense
|
|
-
|
|
-
|
|
1,335
|
|
-
|
Stock-based compensation
|
|
1,795
|
|
1,475
|
|
4,954
|
|
4,668
|
Excess of fair value over cost of acquired inventory
|
|
44
|
|
2,757
|
|
5,689
|
|
7,502
|
Transaction and integration expenses
|
|
928
|
|
-
|
|
1,269
|
|
477
|
Less
|
|
|
|
|
|
|
|
|
Tax
impact of adjustments
|
|
(3,058)
|
|
(4,854)
|
|
(10,153)
|
|
(14,396)
|
|
|
|
|
|
|
|
|
|
Adjusted non-GAAP Net
Income
|
|
$15,274
|
|
$12,986
|
|
$44,053
|
|
$33,065
|
|
|
|
|
|
|
|
|
|
Diluted
Weighted-Average
|
|
|
|
|
|
|
|
|
Shares
Outstanding
|
|
11,804
|
|
11,677
|
|
11,767
|
|
11,666
|
|
|
|
|
|
|
|
|
|
Adjusted
non-GAAP
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share
|
|
$
1.29
|
|
$
1.11
|
|
$
3.74
|
|
$
2.83
|
ANI
Pharmaceuticals, Inc. and Subsidiaries
|
Table 5:
Cortrophin® Gel Re-Commercialization Milestone
Update
|
|
|
|
|
|
|
|
|
Step
|
Duration
|
Status
|
Additional
Details
|
Manufacture
small-scale batch of corticotropin API
|
4
mos.
|
Complete
|
•Initial batch yields
similar to historical yields
|
•Analytical method
development and testing ongoing
|
Select drug
product CMO
|
6
mos.
|
Complete
|
• Drug product CMO
has been selected
|
Manufacture
intermediate-scale batches of corticotropin
API
|
4-6 mos.
|
Complete
|
•Four
intermediate-scale batches successfully completed
|
•Further
refined/modernized analytical methods and process
|
•Demonstrated
lot-to-lot consistency
|
Type C meeting
with FDA
|
|
Complete
|
• Meeting Request
submitted 4Q17; FDA granted as Type C Meeting
|
• Information
provided on ANI's regulatory plan for
re-commercialization
|
• Initial FDA
response received March 2018 with additional communications
in 2nd Quarter 2018
|
Manufacture demo
batch of Cortrophin® Gel
|
1 mo.
|
Ongoing
|
•Initiate non-GMP
formulation/fill/finish of drug product at commercial
scale
|
Manufacture
commercial-scale batches of corticotropin API
|
2-3 mos. per
batch
|
Ongoing
|
• Analytical Method
Validation for API Release/Stability
|
• Scale-up
manufacturing process 5x to projected commercial scale
|
• Manufacture API
under cGMPs
|
• Finalize API
manufacturing process and initiate process
validation/registration batches
|
Initiate
manufacture of registration batches of Cortrophin®
Gel
|
1 mo. per
batch
|
Q1 2019
|
• Analytical Method
Validation for drug product Release/Stability
|
• Process
validation
|
•
Registration/Commercial batches
|
• Initiate
registration-enabling ICH stability studies
|
Initiate
registration stability for sNDA
|
6
mos.
|
1H 2019
|
•Six months of
accelerated stability from drug substance and drug product
batches at time of submission
|
sNDA
submission
|
|
Q1 2020
|
•Filing - four month
PDUFA date
|
View original
content:http://www.prnewswire.com/news-releases/ani-pharmaceuticals-reports-third-quarter-and-year-to-date-2018-results-and-reaffirms-guidance-300744068.html
SOURCE ANI Pharmaceuticals, Inc.