ANI Pharmaceuticals(ANIP)2021-08-06 16:20Financial Data and Key Metrics - Q2 2021 revenues totaled 48.5 million in Q2 2020, showing minimal growth [8] - Adjusted non-GAAP EBITDA for Q2 2021 was 2.3 million or 15% from Q2 2020 [20] - Gross margin for Q2 2021 was 57.2%, compared to 60.9% in Q2 2020, primarily due to increased volumes at lower average selling prices [18] - Net debt as of June 30, 2021, increased to 159.5 million as of March 31, 2021, driven by borrowings for the Sandoz acquisition [21] Business Line Performance - Generic products sales were 33.4 million in Q2 2020, driven by increased sales of fenofibrate, Potassium Citrate ER, vancomycin oral solution, and the launch of Nicardipine [16] - Branded products sales were 10.6 million in Q2 2020, primarily due to the launch of four products acquired from Sandoz and increased sales of InnoPran XL [17] - Contract manufacturing revenues decreased to 2.9 million in Q2 2020, due to lower order volumes [17] - Royalty and other revenues decreased to 1.5 million in Q2 2020, reflecting declines in product development revenues and non-recurrence of Yescarta royalties [17] Market Performance - The U.S. generic prescription market showed initial signs of recovery in Q2 2021, with total prescriptions up compared to prior year and prior quarter, though still below pre-COVID levels [15] Company Strategy and Industry Competition - The company refiled its sNDA for Cortrophin Gel on June 29, 2021, with a goal date of October 29, 2021, marking a significant milestone in its growth strategy [7][9] - The acquisition of Novitium is on track to close in the second half of 2021, pending FTC clearance, and is expected to enhance R&D capabilities and focus on niche opportunities [11][12] - The company acquired the NDAs for Oxistat, Veregen, and Pandel cream, and the ANDA for ApexiCon cream from Sandoz, integrating these dermatology products into its portfolio [13] - The company is monitoring competitive dynamics in the Cortrophin market, particularly the decline in sales of Acthar, and believes its holistic commercial strategy addresses these challenges [27] Management Commentary on Operating Environment and Future Outlook - The company remains cautious about the impact of COVID-19 on script activity and reiterates its full-year guidance, albeit with a continued orientation towards the low end of the range [21] - The company is focused on executing its four-pillar growth strategy, including building a successful Cortrophin business, strengthening its generics business, maximizing the value of its established brands, and enhancing R&D capabilities [7][11][13] Other Important Information - The company entered into a settlement agreement with Arbor Pharmaceuticals, resolving long-standing commercial litigation, resulting in an $8.4 million charge in Q2 2021 [20] - Novitium has gained approval to launch nine new products and filed four new ANDAs, performing in line with or ahead of investment expectations [12][31] Q&A Session Summary Question: FDA interactions and competitive dynamics for Cortrophin - The company has engaged in productive communication with the FDA regarding the sNDA for Cortrophin Gel and is pleased with the progress [26] - The company cannot comment on specific labeling discussions, including the infantile spasms indication, due to competitive reasons [27] - The company is monitoring the decline in sales of Acthar and believes its commercial strategy addresses the competitive challenges [27] Question: Novitium acquisition and FTC review - The Novitium acquisition remains on track to close in the second half of 2021, with active planning for integration and combining complementary strengths [30] - Novitium has maintained a strong track record with the FDA, including a successful GMP inspection, which is a positive indicator for the acquisition [31]