ANI Pharmaceuticals(ANIP) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (unaudited) Unaudited H1 2025 financials show significant growth in assets, revenues, and net income, driven by the Alimera acquisition and new capital structure Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | 217,797 | 144,861 | ▲ $72,936 | | Total Current Assets | 602,630 | 527,684 | ▲ $74,946 | | Intangible assets, net | 520,320 | 541,834 | ▼ $21,514 | | Total Assets | 1,343,001 | 1,283,697 | ▲ $59,304 | | Liabilities & Equity | | | | | Total Current Liabilities | 236,835 | 193,680 | ▲ $43,155 | | Non-current debt, net | 301,484 | 309,108 | ▼ $7,624 | | Non-current convertible notes, net | 306,862 | 305,812 | ▲ $1,050 | | Total Liabilities | 881,394 | 855,167 | ▲ $26,227 | | Total Stockholders' Equity | 436,757 | 403,680 | ▲ $33,077 | Q2 2025 vs Q2 2024 Statement of Operations | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | 211,371 | 138,040 | ▲ 53.1% | | Operating income | 13,892 | 5,169 | ▲ 168.7% | | Net Income (Loss) | 8,549 | (2,287) | ▲ N/A | | Diluted EPS | $0.36 | $(0.14) | ▲ N/A | H1 2025 vs H1 2024 Statement of Operations | Metric | H1 2025 ($ thousands) | H1 2024 ($ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | 408,493 | 275,470 | ▲ 48.3% | | Operating income | 40,086 | 25,481 | ▲ 57.3% | | Net Income | 24,230 | 15,920 | ▲ 52.2% | | Diluted EPS | $1.05 | $0.70 | ▲ 50.0% | Cash Flow Summary for the Six Months Ended June 30 | Cash Flow Category | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 110,803 | 35,683 | | Net Cash (Used in) Provided by Investing Activities | (26,755) | 4,484 | | Net Cash Used in Financing Activities | (11,653) | (21,178) | | Net Change in Cash | 72,939 | 18,989 | - The significant increase in cash from operations in H1 2025 was driven by higher net income ($24.2M vs $15.9M YoY) and favorable changes in working capital, including accrued royalties and government rebates[24] - Investing activities in H1 2025 primarily consisted of $20.3 million for the acquisition of product rights and intangible assets. In contrast, H1 2024 included $13.5 million in proceeds from the sale of a building[24] - On September 16, 2024, the company completed its acquisition of Alimera Sciences, Inc., adding two new products, ILUVIEN® and YUTIQ®, for treating chronic retinal diseases[26] - The company sold its Oakville, Ontario manufacturing site in March 2024 for approximately $14.2 million, resulting in a gain of $5.3 million in H1 2024[27][68] - In August 2024, the company issued $316.3 million of 2.25% Convertible Senior Notes due 2029 and entered into a new credit agreement for a $325.0 million term loan to finance the Alimera acquisition and repay previous debt[73][81] - The company reorganized its business into two reportable segments: 'Rare Disease and Brands' and 'Generics and Other' following the Alimera acquisition[199][200] - A subsequent event note indicates the 'One Big Beautiful Bill Act' was signed into law on July 4, 2025, which includes significant tax law changes that the company is currently evaluating[205][206] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q2/H1 2025 performance to strategic execution, driven by Rare Disease and Brands growth, Alimera acquisition, and new capital structure - The company's strategy focuses on building a sustainable biopharmaceutical company with key growth drivers in its Rare Disease and Brands segment and its Generics and Other segment[211] - The acquisition of Alimera in September 2024 is a cornerstone of the strategy, strengthening the Rare Disease business with the ILUVIEN and YUTIQ 'Retina Franchise' and expanding the company's footprint beyond the U.S[209][213] - Recent developments include the FDA approval of an expanded label for ILUVIEN and a new prefilled syringe format for Cortrophin Gel, both aimed at enhancing market position[215][216] - In March 2025, the company exercised a buy-out option for $17.3 million to eliminate future royalty payments to SWK Funding LLC on ILUVIEN and YUTIQ net revenues[221] Q2 2025 vs Q2 2024 Net Revenue Breakdown ($ thousands) | Segment/Product | Q2 2025 | Q2 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cortrophin Gel | 81,647 | 49,193 | 32,454 | 66.0% | | ILUVIEN and YUTIQ | 22,316 | — | 22,316 | n/m | | Rare Disease & Brands Total | 117,158 | 59,220 | 57,938 | 97.8% | | Generics and Other Total | 94,213 | 78,820 | 15,393 | 19.5% | | Total Net Revenues | 211,371 | 138,040 | 73,331 | 53.1% | H1 2025 vs H1 2024 Net Revenue Breakdown ($ thousands) | Segment/Product | H1 2025 | H1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cortrophin Gel | 134,497 | 86,130 | 48,367 | 56.2% | | ILUVIEN and YUTIQ | 38,425 | — | 38,425 | n/m | | Rare Disease & Brands Total | 211,240 | 121,836 | 89,404 | 73.4% | | Generics and Other Total | 197,253 | 153,634 | 43,619 | 28.4% | | Total Net Revenues | 408,493 | 275,470 | 133,023 | 48.3% | - Q2 2025 Cost of Sales increased 29.3% to $74.6 million due to higher sales volumes, but decreased as a percentage of revenue to 35.3% from 41.8% YoY, indicating improved product mix/margins[234][235][236] - Q2 2025 operating expenses increased significantly: R&D rose 126.6% to $16.5 million, and SG&A grew 54.8% to $81.8 million, reflecting investments to support the expanded business post-Alimera acquisition[237][242] - The company's capital structure was reshaped in 2024 with a new $325.0 million Term Loan A and the issuance of $316.3 million in 2.25% Convertible Senior Notes to fund the Alimera acquisition and refinance old debt[255][261] - As of June 30, 2025, $75.0 million remains available for borrowing under the TLA Revolver[257][272] - Net cash from operations for H1 2025 was $110.8 million, a significant increase from $35.7 million in H1 2024, driven by higher net income and working capital improvements[274] - Management believes that current financial resources are sufficient to meet working capital requirements and debt obligations for at least the next 12 months[272] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes in the company's exposure to market risks, including interest rate, equity, and foreign currency, since fiscal year 2024 end - There have been no material changes in the company's exposure to market risks since the end of the most recent fiscal year as reported in the 2024 Form 10-K[278] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[280] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[281] PART II — OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, including commercial and patent litigation, with outcomes uncertain, as detailed in Note 15 - The company is involved in ongoing legal proceedings, which are detailed in Note 15 of the financial statements[282] - Key legal matters include commercial litigation against CG Oncology, where a jury returned a verdict of no damages for ANI, which ANI plans to challenge, and a false advertising lawsuit with Acella Pharmaceuticals[159][161] - The company is also a defendant in patent litigation concerning its generic drug applications and in broader litigation related to ranitidine products[162][164] Item 1A. Risk Factors The report refers to the 2024 Form 10-K for detailed risk factors, noting no new or materially changed risks in this quarterly report - For a detailed discussion of risk factors, the report refers to the 'Risk Factors' section in the company's 2024 Form 10-K[283] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales occurred, but the company repurchased 9,022 common shares for tax withholding on restricted stock awards - There were no sales of unregistered securities during the reporting period[284] Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 1,030 | $69.55 | | May 1 - May 31, 2025 | 7,892 | $59.84 | | June 1 - June 30, 2025 | 100 | $62.56 | | Total | 9,022 | $60.98 | - The shares purchased were acquired from employees to satisfy tax withholding obligations related to the vesting of restricted stock awards and were not part of a formal repurchase program[286] Item 5. Other Information A Rule 10b5-1 trading plan was adopted by Christopher Mutz on June 16, 2025, for potential stock sales from January 7 to March 20, 2026 - On June 16, 2025, Christopher Mutz, SVP, Head of Rare Disease, adopted a Rule 10b5-1 trading plan for the potential sale of company stock[290] - The trading plan is scheduled to be active from January 7, 2026, to March 20, 2026, and covers the sale of up to 4,019 shares of common stock, plus shares from vesting RSAs and PSUs[290]