ANI Pharmaceuticals, Inc. Stock

Good morning, everyone, and thanks for joining us. I'm Daniel Cohen from Morgan Stanley, and it's my pleasure to welcome you to this fireside chat with ANI Pharmaceuticals. ANI is a diversified biopharmaceutical company that has transformed itself into a Rare Disease growth story led by Cortrophin Gel and a growing ophthalmology portfolio, supported by strong cash-generative generics and established brands businesses.

It's been a standout year, results ahead of expectations, multiple guidance raises and real acceleration across the Rare Disease franchise. I'm joined by 2 leaders who can take us through it. Nikhil Lalwani is ANI's President and Chief Executive Officer, a role he's held since 2020 and the architect of the company's pivot to Rare Disease strategy. And Steve Carey is ANI's Chief Financial Officer and Senior Vice President of Finance, who has been with the company since 2016 and leads its financial strategy and capital allocation.

Nikhil, Steve, thank you for joining us. Let's get into it.

Thank you, Daniel. Good morning, everybody, and thank you for joining us bright and early.

Nikhil, you've now been the CEO for 6 years. How do you feel about the progress made thus far? And what's your vision for the future of ANI?

Yes. Thank you, Daniel. I'm really pleased with the progress made by the team across the last 6 years. We have made several important steps for the company and the company's trajectory, starting with -- when I joined as CEO in 2020, we were largely a BD shop. We did business development in generics and in established brands or older brands. And we sat together with the Board and a big believer in moving capability forward and building capabilities in the organization. And there are 2 successful capabilities that we've built as a result, 2 successful high-performing businesses.

First is our Rare Disease business, right, and the commercialization that goes with that. So the capability to commercialize Rare Disease products. That's a key capability we've built. And then the second is generics, right, developing, manufacturing and commercializing generics products. So I'll just talk you through those 2. On the Rare Disease front, our lead asset, Purified Cortrophin Gel, we got that the sNDA approved in October 2021 and launched that drug in January of 2022. When we built that team, we really went out there and hired the best talent that we possibly could from leading Rare Disease organizations. And most of those individuals are still with us.

And really, that's the anchor of the capability that we've built in Rare Disease. And it's across the sales team, medical affairs, market access, patient support, specialty pharmacy distribution. It's across the board. It's really the platform or the infrastructure that we've built with the team as the anchor to it and obviously strengthen the systems and processes along the way. And then second is our Generics business, where we were a BD shop, as I was saying. And we went and acquired Novitium, which is a leading generics R&D organization, massive R&D capability and capability that was well ahead of what they could fund. And over the past 4 years, 5 years, we've been able to have significant success with that acquisition.

So both Cortrophin and the Novitium acquisition have been runaway successes for us and then really just built that capability where we can do 10 to 15 new product launches every year on the back of that R&D capability and generate EBITDA and cash flows that, as you pointed out in your introduction, we are taking to reinvest into the Rare Disease business. Vision for the future is very clear. We're leading our transformation into -- accelerating our transformation into a leading Rare Disease company.

In 2026, our -- approximately 60% of our revenues -- approaching 60% of our revenues will come from Rare Disease. So really just overall, very pleased with the progress over the last 6 years, taking revenues from right around $200 million to north of $1 billion this year, 5x and similar growth in EBITDA. So -- and building 2 high-performing businesses in Rare Disease and in Generics.

Great. Thanks, Nikhil. Let's start with the Rare Disease product, Cortrophin Gel. Could you talk through the unmet need that it addresses and how big the addressable market is?

Sure. So Purified Cortrophin Gel is a repository corticotropin. It's derived from the pituitary glands of porcine. So it's a naturally derived product. And it is shown to bind with -- in an in vitro basis with all 5 melanocortin receptors, which are cell surface proteins. What Cortrophin Gel is used for is across multiple autoimmune indications to deal with inflammations or exacerbations and flares. And it is appropriate for treatment of patients who generally are not responding to other treatments such as steroids or have high side effect profile with steroids.

So that's the role that Cortrophin Gel plays. We are approved in multiple indications. The 6 or 7 specialty areas or indications we focus on are rheumatology, nephrology, neurology, ophthalmology, pulmonology and acute gouty arthritis. When you talk about addressable market across the different specialties and indications, we believe there are approximately 1 million patients, right? Now as I walk you through that, the indication itself may not be rare, but the addressable patient population or the appropriate patient population is much smaller across the broader incidence disease. And let me talk -- let me just explain that.

So if you take acute gouty arthritis flares, there are 10 million patients in the U.S. that suffer from acute gouty arthritis flares. A number of them resolve -- those flares resolve on their own. Some get treated well by treatments such as prednisone and colchicine, et cetera. But there's a very small subset of patients, which we see is about 285,000 that their flares require IV or injectable treatments. So that's 285,000 out of 10 million. And that's what we think of as addressable market. So similarly, if you do the same analysis across multiple sclerosis, rheumatoid arthritis, nephrotic syndrome and the sarcoidosis, et cetera, you get to about 1 million patients.

And we're just getting started between the competitor and us, right, because there's one other player in the ACTH category. We are currently both a combined basis, serving a fraction of that 1 million -- a very small fraction of that 1 million addressable patient population.

Can you talk a little bit more about the expansion into primary care and podiatry for the Gouty flares and how that's going?

Sure. So we've -- we're in year 5 of our launch. And every year, as we're trying to reach more patients, one of the ways we do that is by reaching new prescribers. And while this category has existed for a while, an important metric is that over half of our prescribers, even before this most recent expansion, comes from prescribers that were naive to ACTH that had never tried ACTH before, the ACTH category.

So as we were working across the first 4 years, what we found is that approximately 18% of our usage came from acute gouty arthritis flares that there was a real need there. However, the call points that we were going to, the specialties we were going to, which are rheumatology and nephrology, only tackle a small subset of the addressable patient population. And there's an increasing -- we learned that there's an increasing number of patients that are seen by primary care and podiatrists, right? It's just early. It's easier to get appointments with them, et cetera. So there's a lot of patients that have suffered from acute gouty arthritis flares that are -- that's being seen at primary care and podiatry.

So last year, in '25, mid of '25, we launched pilots in 10 territories, 10 existing territories we had, where we asked a number of our reps in those territories to go out there and obviously, with a coordinated effort with corporate, figure out what are these patients -- prescribers that actually write primary care and podiatrists that actually write for acute gouty arthritis. And we saw huge success there and believe that this is something that could be scaled. And so in May of this year, we launched a 60-person sales force, which is about a 50% expansion in our sales force. We had about 120 reps before, and then we added 60 reps.

The 120 went into other specialties, which I can cover later. But the 60, the expansion we did went to primary care and podiatrist. And by the end of June, all of them had been trained and in the field. And we've had very strong indicators of -- leading indicators of demand from what we've seen so far. All the reps that were hired in May and June have had 2 or more cases initiated. We've -- in fact, we've actually started seeing refills already from a number of the patients. We see over 1/3 of our prescribers. Actually, that number is probably higher by now that have written 2 or more cases. So you're seeing both width and depth of prescribing, and we're seeing demand generation, in fact, across regions -- there's not 1 or 2 regions that are seeing that.

So what we saw in those 10 pilots has been scaled up to across 60 territories. And we're very pleased with the success that we've had to date. And we believe that this acute gouty arthritis flares expansion or just gout expansion will help us with the investment we've made this year to get operating leverage next year. So next year, going into '27, we'll see a lot more sales in '27 from the investment we made. It takes 3 to 6 months for the reps to ramp up, right? And basically, in '27, we'll see a lot more sales.

Of course, there's a significant impact that they will also have in the back half of '27. And then last important fact to share with you regarding this gout expansion is that acute gouty arthritis flares is an indication that we have that the competitor does not have the other player in the ACTH category. So when you think about why did we select this area for investment, it was because we saw proof of concept in the 18% volume we saw in nephrology and rheumatology for gout. It's an indication that we have that the competitor doesn't have. And then we also saw success in the ten pilots. So we're very pleased with that progress.

Okay. And then just closing out on Cortrophin Gel. In Q2, you raised guidance to $520 million to $540 million for sales for the year. Is that dependent on the existing specialties? Or is that more driven by the new expansion that you just discussed?

Sure. So when you think about our sales last year was $348 million, and our guide is $520 million to $540 million, which is an adjustment that we made in the guidance in the second quarter. The growth -- majority of the growth from $348 million to $520 million to $540 million will come from the existing specialties, which are rheum, neph, neuro and ophthalmology and pulmonology. That's the existing specialties. And then the gout expansion will contribute significantly in the back half. But if you think of the $348 million going to $520 million to $540 million, majority of that growth will come from the existing specialties.

Where we've continued to have strong impact. I mean, if you take the first half of the year, right, we've had 45% growth in the first half of the year, where we've done $192 million across Q1 and Q2. And all of that because the gout expansion team only came in midway through May and then was really operational. So their impact on Q2 was minimal. So all the growth that you see in the 46% year-over-year growth in H1 '25 versus H1 '26 came from the existing specialties. And that momentum we expect to continue into the back half, compounded by the impact from the gout expansion.

Impressive growth on Cortrophin Gel. Maybe just turning to the ophthalmology franchise and ILUVIEN. You're planning to present additional data, SYNCHRONICITY data at a conference in the fall. Can you speak to what's new with ILUVIEN and that data and how that could drive growth in the future?

Sure. So SYNCHRONICITY was an open-label study that we completed. It shows the use of ILUVIEN in chronic noninfectious uveitis for in the posterior segment of the eye. We believe that this -- we have released the 6-month data earlier this year, and we'll be releasing the more comprehensive analysis at an upcoming conference in Q4. And we believe that this data will provide additional insights and real data to clinicians, both retina specialists and uveitis specialists to show the use of ILUVIEN, which is a durable reduced treatment burden option for the treatment of chronic noninfectious uveitis in the posterior segment of the eye.

And so we're sharing additional analysis, both on efficacy as well as safety and use cases that we believe will be very helpful for clinicians as they evaluate alternate treatment options for the treatment of these patients.

Okay. Thanks, Nikhil. We talked a bunch about the Rare Disease franchise. But as you mentioned in the intro, your Generics business has been a strong performer. Can you just talk a little bit more -- expand upon more how that fits in with your business and how it contributes to the overall goals for the company?

Sure. So we have a high-performing Generics business. We've delivered north of 20% CAGR growth for the last 4 or 5 years. The success of our Generics business is anchored on a strong R&D capability where we launch 10 to 15 new products every year. We invest a high single-digit percentage of our generic sales into R&D for generics, and that fuels the 10 to 15 launches that we've had every year. We have the #2 position in competitive generic therapy launches, which, again, highlights the strong capability we have in generics in generics R&D.

In addition, what we have is a U.S.-based manufacturing footprint that we are very proud of. We have 3 manufacturing facilities, 1 in East Windsor, New Jersey and 2 in Baudette, Minnesota. 95% of the products that ANI sells are sourced from plants in the U.S., and we're very proud of that. We have a very strong GMP track record. So it's a combination of -- so we have a strong GMP track record across our manufacturing sites. So it's a combination of the superior R&D capability and execution, along with strong operational excellence across our manufacturing sites that has enabled us to deliver very strong growth from our Generics business.

And the role that the Generics business plays, even though it's a very -- it's a high-performing business, from a capital allocation perspective, we invest high single-digit percentage of OpEx into generics R&D -- sorry, high single-digit percent of generic sales into generics R&D and then use the EBITDA and cash flows for reinvestment as we accelerate the transformation of ANI into a leading Rare Disease company. But very pleased and proud of the progress and the success of our Generics business.

Great. Yes, it's been certainly a bright spot for the company, certainly relative to the industry. Maybe turning a little bit to some financial-related questions. And here, I think, obviously, Steve should weigh in as well. But how do you think about capital allocation for the company overall between reinvesting in the business? You talked a bunch about BD at the outset as the history of the company and share repurchases. How do you think about that?

Yes. Thanks, Daniel. First of all, I should start off by just saying the culmination of all of the efforts and the business building that Nikhil has been discussing. We're very pleased with the way that's manifesting on our balance sheet. As of June, we had $360 million approximately on the balance sheet, kicking off significant free cash flow. In the first 6 months ended June of 2026, we had $100 million of free cash flow as compared to $150 million for the full year of 2025.

So that accelerating cash flow, the organic delevering where we stand at about 1x net levered as of June really allows us a lot of flexibility in terms of how we continue to operationalize and build the business. And when we think about those capital allocation choices, really, I think job #1 for the cash is to continue to reinvest in the business organically to have a high degree of flexibility to make choices like building the additional 60-person gout field force. Then number two would be, as we've stated, we're building the next great Rare Disease business. And we intend to do that through future M&A and business development. And that would be #2 for cash.

And then also back in May, we put in place $100 million 3-year share repurchase program in place that just allows us flexibility as we move out in time in terms of how we use that capital as well. A little bit more on BD and M&A aspirations as we think about the next steps there, we're focused on deals that will allow us to expand the commercial portfolio. So more likely than not focusing in on products that are either commercialized already and fairly early in their commercial life cycle or right on the cusp of getting approval. And then we look to build out in the years to come around that type of strategy.

And would you expect in terms of BD, would that be Rare Disease generally or any particular area?

Yes, yes. Very clear that our aspirations there are to expand the Rare Disease side of the business.

Yes. And just to build on what Steve said, there are really 2 types that we're looking for, and we're pretty actively searching and scanning and diligencing. One is we have -- with our lead asset, we have the benefit of having multiple call points that our sales force engages with. And so an asset that can be synergistic with that, right, whether it's just into rheumatology, neurology, nephrology, ophthalmology, pulmonology and now primary care and podiatry. So that's multiple call points. So it's a wider aperture, which is beneficial for us.

But second and equally important is we have the rest of the infrastructure, right, patient support, medical affairs, market access, specialty pharmacy distribution, all the other aspects of a Rare Disease business that is required for commercialization. So the sales force gets you the prescription or the enrollment, but then the rest of the infrastructure works with the physician's office and the insurance company and the patient to actually get the patients on therapy. And that is a core capability, too.

So if we were to look at an asset which requires a setup of a small sales force, but into a new call point, which has rare indications or even ultrarare, that is okay because that's an area that we know how to work with the prescriber's office to find the patient, the appropriate patient, of course, but then also the rest of the infrastructure to pull that enrollment onto therapy or paid drug.

So you have an infrastructure that can be further utilized and leveraged.

Correct, correct. Both with the sales force and the back-end infrastructure.

Maybe just looking to the future, can you talk about guidance for 2026 and then outlook for 2027?

Sure. So as far as '26 goes, our guidance for the year is $1.080 billion to $1.140 billion in revs, which is about 26% growth. And for adjusted non-GAAP EBITDA is $285 million to $300 million, which is approximately 27% growth. This is even in a year, so you're seeing growth -- EBITDA growth faster than top line in a year where we're investing approximately $50 million in additional OpEx for that gout expansion that we spoke about. So it's important for us to keep balancing growth and profitability as we're driving the business forward.

As we look to '27, we're not going to give guidance, but I think in terms of the outlook -- from a Rare Disease perspective, the investments we've done this year will continue to bear fruit next year. What do I mean by that, that there will be significantly higher sales from the expansion that we did this year. So with the same level of SG&A, you'll see higher sales next year, driving operating leverage. For our Generics business, in '25, we had a very, very strong year. And then in '26, we -- our guidance has been to be roughly flattish.

Historically, we've always guided the Generics business to be high single digits to low double digits type growth, and we will reorient back to that overall time frame for the '27 and beyond, but both obviously get to the specifics when we give overall total company guidance. So yes, look, we have a strong platform, 2 high-performing businesses, and that will continue to drive growth and success of ANI in '27 and beyond.

And maybe just to wrap, what are you most excited about for ANI in the future? And perhaps what do investors not appreciate?

Sure. Yes. Look, I think it's been an honor and a privilege to be here for 6 years and work with -- and build and work with an amazing team to serve patients and improve lives. That's the purpose of our company, serving patients, improving lives. And every day, we get a chance to make that difference, whether it be for the appropriate patient in a small patient population through our Rare Disease business, right, where there's a significant unmet need and existing therapies are not sufficient and so to bring the appropriate therapy for them.

That makes a big difference in the lives of those people and their -- of the patients and their families, but also at scale, right, where our Generics business delivers 2.5 billion doses to patients in the U.S. And I think that is a different level of impact. So every morning, you wake up and no matter what you're dealing with, you have the chance to make an impact in patients' lives. That's what excites me and working with our amazing team and continuing to build that. That's what excites me the most, serving patients, improving lives. As far as what we believe the investors appreciate a little bit less, at least in the near term, that's what's been happening, is just the long-term growth and durability of our Rare Disease business and of our overall business. The opportunity for Cortrophin is intact. The addressable market for Cortrophin is very large between the competitor and us.

We're serving a fraction of -- a small fraction of the patients that can be -- that are appropriate, we believe. And there is a significant multiyear growth opportunity for Cortrophin. A very important fact that we -- that I didn't address earlier is it's a very -- it's a tough drug to genericize, both ours and the competitor's. We have IP that goes into 2043. And so the durability, right? I believe that the durability and the significant multiyear growth potential that our company has, I don't think we're getting enough credit for that.

Thank you. Well, I want to thank Nikhil and Steve for being here bright and early and kicking off this year's Morgan Stanley Healthcare Conference. I'll turn it over to the crowd to the extent there's any questions. If not, thank you very much.

Yes. Thank you, Daniel, and thank you, Morgan Stanley team. Thank you for being here.

Thank you.

Thank you.

Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. Second Quarter 2026 Earnings Results Call. Please note this call is being recorded. [Operator Instructions] It is now my pleasure to turn the conference over to Irina Koffler. Please go ahead.

Thank you, Daniel. Welcome to ANI Pharmaceuticals' second quarter 2026 earnings results call. This is Irina Koffler, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer, Stephen Carey, Senior Vice President and Chief Financial Officer, and Chris Mutz, Senior Vice President and Head of ANI's Rare Disease Business. Earlier this morning on August 7, 2026, we released our results for the second quarter 2026 via a press release that is available on our website. This call is also available via webcast and is accompanied by a slide deck that can be accessed by going to the events section of the investors page of our website. Before we begin, I would like to remind you that we will be making forward-looking statements and discussing certain non-GAAP measures. Forward-looking statements are subject to substantial risks and uncertainties, speak only to the call's original date, and we take no obligation to update or revise any of the statements.

During this call, we will also refer to certain non-GAAP financial measures to describe our performance and have provided a reconciliation to the most directly comparable GAAP financial measures within the materials that accompany this call. The archived webcast will be available for 30 days on our website, anipharmaceuticals.com. And with that, I'll turn the call over to Nikhil Lalwani.

Thank you, Irina. Good morning, everyone, and thank you for joining us for ANI's second quarter of 2026 earnings call. Starting on slide 5, our entire organization demonstrated outstanding focus during the second quarter as we continued to transform ANI into a leading rare disease company. We recorded record second quarter 2026 revenues of $266 million for the overall business, record Cortrophin revenues of $117.1 million and record adjusted EBITDA of $71.6 million. In the second quarter, we grew total net revenues 26% year over year, driven by persistent execution across our rare disease and generics businesses with incremental contribution from the Harmony Biosciences intellectual property out-licensing deal we announced last quarter. We also grew adjusted EBITDA 32% year over year to an all-time high and above our prior expectations. Furthermore, we achieved all of this while executing the single largest rare disease sales force expansion in our history. We increased our sales force by 50% to approximately 180 reps. Our strategic plan is on track and we are well positioned to drive meaningful growth in 2026 and beyond.

Turning to slide 6. Our first area of focus in our transformation into a rare disease company is delivering organic growth for our durable branded rare disease medicines, Cortrophin Gel and ILUVIEN. We delivered $117.1 million in Cortrophin Gel net revenues for the second quarter, up 43% year over year and 56% over first quarter 2026, consistent with the expectations we outlined during our last quarterly call. Second quarter revenues from our existing specialties of rheumatology, nephrology, neurology, ophthalmology and pulmonology was healthy and we are seeing significant momentum in demand in the third quarter with July representing the highest month for new cases initiated. We expect our existing specialty sales force to be able to meet the needs of the community to continue its strong trajectory in the second half of 2026. We completed our gout-focused organization expansion, and the team was fully operational at the end of June, as expected. We are pleased that we have seen strong demand driven by the high unmet need for patients who are most severely impacted by acute gouty arthritis flares and who need an additional treatment option. Our leading indicators are very positive, such as total new cases initiated, cases initiated per sales rep, and a number of prescribers with multiple new cases.

We believe we are at the start of a sizable inflection for this business and look forward to updating you on our progress. Taking a step back, our conviction in the growth and durability of Cortrophin Gel have only increased over time since our 2022 launch. Cortrophin has grown at a compounded annual growth rate of 103% to $348 million in sales in 2025, and we're just getting started. We believe Cortrophin will serve as the key building block catalyzing our transformation into a rare disease company. Now that we are midway through the year, we are modestly revising our Cortrophin Gel revenue guidance to $520 million to $540 million, primarily to account for results in the first half of 2026. Our expectations for the back half remain largely intact with what we had expected at the start of the year. Importantly, this still represents 50% to 55% growth for Cortrophin compared to 2025, and the addition of the gout expansion creates a strong new growth trajectory for Cortrophin.

We believe we are well-positioned to achieve our revised 2026 guidance based on the continued momentum in existing specialties, as evidenced by the highest new cases in July, and the strong demand generation from the gout expansion. For ILUVIEN, we delivered $18.7 million of revenue in the second quarter. We announced the top line results from the Phase 4 open-label SYNCHRONICITY trial in NIU-PS and plan to unveil detailed results and additional analysis at a medical conference in the fourth quarter of 2026. These results are particularly relevant for retina specialists who see a large population of uveitis patients. Uveitis remains a category in which steroids are the standard of care and where we see an opportunity to build an increasing share of voice over time. Over the long term, we continue to believe the addressable patient populations in DME and NIU-PS represent at least 10x the number of patients treated with ILUVIEN today, a significant and durable opportunity for value creation. Turning to slide 7, our second strategic priority is continued execution in generics. We have launched 12 generics in 2026 and are on track to launch at least 15 in the full year.

We'll also continue to hold our position as the #2 player in overall CGT filings. Driven by our superior R&D capabilities and operational execution, we delivered another strong quarter with generics revenue of $99.1 million, up 10% year over year. As a reminder, ANI is uniquely positioned to capitalize on opportunities in the evolving generic landscape that may arise. Approximately 95% of our revenues coming from finished goods manufactured in the U.S. Bringing high-quality generics and rare disease products made in the U.S. to our patients plays an important role in our success. Third, we remain focused on executing a disciplined capital allocation strategy. We are investing in organic growth that have expanded our Cortrophin commercial footprint in acute gouty arthritis flares. We continue to deploy a high single-digit percentage of generics revenue into generics R&D programs. We are also evaluating attractive inorganic growth opportunities to expand the scope and scale of our rare disease business.

Turning to slide 8, our strong second quarter performance demonstrates the steadfast execution of our strategic priorities as we deploy the cash created by generics and brands in our virtuous cycle towards our transformation to becoming a leading rare disease company. We are confident in delivering 50% to 55% Cortrophin revenue growth in 2026 and are pleased that our gout expansion is off to a strong start. Taken together, these initiatives are expected to create operational leverage in 2027 and beyond as we maximize the corporate growth opportunity. In 2026, we expect to deliver $1.1 billion in revenue, representing 26% growth over 2025 at the midpoint of our guidance range, with rare disease as the primary driver of that growth. We also expect to expand the bottom line with adjusted EBITDA, forecasted to grow 27% year-over-year to $285 million to $300 million. The balance sheet is healthy with the capacity to support for future potential business development opportunities to expand the scope and scale of our rare disease business. I'll now turn the call to Chris to discuss our rare disease business and provide color from the ongoing launch in acute gouty arthritis flares.

Chris?

Thank you, Nikhil, and good morning, everyone. In the second quarter, Cortrophin grew 43% year over year to $117.1 million, in line with our expectations. This growth originated primarily from our existing specialties, such as nephrology, neurology, ophthalmology, pulmonology, and rheumatology, which represent the base Cortrophin business before the recent gout expansion. Momentum in our existing specialties has continued into the third quarter with a record number of new cases initiated in July. We also continue to realize meaningful revenue synergies in ophthalmology with second quarter Cortrophin volumes in ophthalmology again doubling over the same period a year ago. Moving now to slide 11. The overall ACTH market is quite healthy and expected to grow nearly 30% in 2026 to reach over $1.3 billion in sales, with Cortrophin expected to grow 50% to 55% year over year in 2026. This market expansion is driven by growth in key under-penetrated specialties that have significant upside potential.

There are a large number of prescribers and patients who are naive to the ACTH category across all therapeutic areas and are steadily reaching this segment including as part of our gout expansion now reaching podiatrists and primary care physicians. Approximately half of Cortrophin Gel prescribers in our core specialties are naive to ACTH. Here on slide 12, we return to the size of the overall opportunity for Cortrophin Gel. Across indications, we estimate there are almost 1 million addressable patients, and yet, to date, ACTH therapies are vastly underpenetrated. With ANI's demonstrated ability to educate healthcare providers to help identify new patients who are appropriate candidates for Cortrophin treatment, we have confidence that there is significant runway for continued strong multi-year Cortrophin growth and market expansion. Turning to slide 13, we have made our largest commercial expansion in the first half of 2026, increasing our sales headcount by 50% to approximately 180 sales representatives based on what we view as a transformational multi-year growth opportunity for our business in the podiatry and primary care settings. Our team was fully onboarded and trained by the end of June and have been out in the field engaging with our new prescribers.

Gout is a condition with significant patient burden, and our market research, as well as our early experience, shows us that people view their disease as disruptive, anxiety-provoking, and frustrating. Pain from acute gouty arthritis flares has been described by some as unbearable and can come on quickly and unexpectedly, especially in the middle of the night or the early morning. We believe podiatrists and primary care physicians are actively managing a much larger volume of acute gouty arthritis flares than specialists, and most often earlier in the patient journey either due to referral gaps or access limitations. Our sales representatives are educating podiatrists and primary care providers about Cortrophin Gel and the identification of appropriate patients. We're focused on the most severe patients who experience multiple flares a year who have previously been treated with injectable medicines like steroids or pain relieving medications. These patients may benefit from an additional treatment option. Our patient support team is helping patients request access to Cortrophin Gel to treat the current flare and to have drug readily available for when the next flare hits.

Turning to slide 14, we feel confident about the opportunity in the podiatry and primary care settings because of the insights and results generated by both the pilots conducted in 10 territories as well as the strong momentum we are seeing today from the gout expansion. In these early days we are pleased to see encouraging trends in our leading indicators. To date we have been generating very strong demand with meaningful breadth and depth of prescribing. Over 95% of our new sales representatives have generated multiple new cases and momentum and demand persists with record new cases achieved by the team week over week. We've seen traction with both primary care and podiatry offices with initial and repeat prescribing. Over 1/3 of our prescribers have initiated 2 or more patient cases. Our patient support team has been successful in helping these patients get access to therapy. ANI's entire organization is dedicated to making this new commercial expansion successful.

We're excited that this weekend our marketing, medical, and sales teams will be engaging with customers at the American Podiatric Medical Association Scientific Meeting, or APMA, being held in Nashville, and we intend to be increasingly visible to this key prescriber audience going forward. I want to thank the entire Cortrophin team for their superior focus and execution. Our new gout expansion is off to a very encouraging start, and we look forward to their contribution in the second half of 2026 and beyond. On slide 15, turning to our retina franchise, we continue to make progress to support a return to growth for ILUVIEN. We recently reported top-line results from the SYNCHRONICITY Phase 4 open-label trial in non-infectious uveitis of the posterior segment and plan to present the detailed results and additional analyses at a medical meeting in fourth quarter 2026. These data will support increased engagement with retina specialists who treat NIU-PS as we continue sharing insights and new findings from the SYNCHRONICITY study. The second quarter reflects strong execution across our team as we continue to accelerate into a leading rare disease company.

With that, I will now turn the call over to Steve to detail our financials.

Thanks, Chris, and good morning to everyone on the call. Now I'll review our second quarter results and 2026 guidance in more detail. Starting with slide 17, ANI total net revenues were $266 million in the second quarter, up 26% over the prior year period. Revenues from Cortrophin Gel in the second quarter were $117.1 million, up 43% from the prior year period, driven by increased volume and performing in line with our expectations. ILUVIEN net revenues were $18.7 million in the second quarter, down 16% from the prior year based on timing of international shipments, we remain on track to meet our full year guidance for this product. In January, we entered into a licensing transaction with Harmony Biosciences. We recognized $17.7 million of associated revenues in the second quarter, consisting of $9.7 million of royalty income on sales of WAKIX and $8 million of revenue based upon work completed in the quarter toward the achievement of certain development milestones.

We expect to recognize the remaining $2 million from the development milestone in the third quarter of 2026. Revenues for generics in the second quarter were $99.1 million, an increase of 10% over the prior year, driven by continued strength in the partner generic launch that commenced in the third quarter of 2025, contribution from new product launches, and commercial and operational outperformance. Turning to slide 18, non-GAAP cost of sales increased 34% to $99.6 million in the second quarter of 2026 compared to the prior year period. Non-GAAP gross margin in the second quarter was 62.6%, a decrease of approximately 230 basis points from the prior year driven by product mix. Non-GAAP research and development expenses decreased 11% to $14.1 million in the second quarter, primarily due to phasing of generic R&D spend. Non-GAAP selling, general, and administrative expenses increased 20% to $80.7 million in the second quarter, driven by our gout expansion for Cortrophin, as well as an overall increase in activities to support the ongoing growth of our business. Adjusted non-GAAP diluted earnings per share was $2.21 for the second quarter, compared to $1.80 per share in the prior year period.

Adjusted non-GAAP EBITDA for the second quarter was $71.6 million, up 32% compared to the prior year period. We ended the second quarter with $360.2 million in unrestricted cash, up $74.6 million as compared to the December 31, 2025 balance sheet. Cash flow from operations was $56.7 million in the second quarter and $115 million on a year-to-date basis. As of June 30, 2026, we had $620.9 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the second quarter, our gross leverage was 2.4 times, and our net leverage was 1 time our trailing 12-month adjusted non-GAAP EBITDA of $259.6 million. Turning to slide 19, we are reaffirming our 2026 financial guidance for total net revenue, adjusted non-GAAP EBITDA, and adjusted non-GAAP EPS, which reflects significant top and bottom line growth, modestly revising our guidance for Cortrophin Gel. Our guidance outlined on slide 19 is as follows.

We expect 2026 total company net revenue of $1.08 billion to $1.14 billion, representing 26% year-over-year growth. From a quarterly cadence perspective, we expect the third quarter total company revenues to be modestly higher as compared to second quarter and accelerating sequential growth in the fourth quarter. We are revising our guidance for Cortrophin Gel net revenue to $520 million to $540 million, primarily to account for results in the first half of the year. Our expectations for the back half of the year remain largely intact. From a quarterly cadence perspective, we expect third quarter Cortrophin revenues to be in the range of $143 million to $153 million, with further sequential gains in the fourth quarter driven by continued performance of our existing specialties team, in addition to the full deployment of our gout expansion sales force. We are reaffirming our ILUVIEN net revenue guidance of $78 million to $83 million, which reflects stronger ILUVIEN revenue in the back half of the year compared to the first half. This guidance assumes no meaningful contribution from third-party patient assistance foundations in line with our prior expectations.

We expect adjusted non-GAAP EBITDA of $285 million to $300 million. From a quarterly cadence perspective, we expect third quarter non-GAAP EBITDA to be down sequentially, however higher than the first quarter of 2026 non-GAAP EBITDA. This will be driven by 2 factors. First, we expect to recognize the final $2 million Harmony development milestone in the third quarter as compared to the $8 million recognized in the second quarter. Secondly, the third quarter will be the first fully loaded quarter of the gout expansion and associated operating expense. We continue as we begin to achieve leverage on the gout expansion with increasing Cortrophin Gel revenues. We continue to expect adjusted non-GAAP earnings per share between $9.19 and $9.69.

We continue to expect adjusted gross margin to be between 59.9% and 60.9% in 2026. We continue to anticipate between 21.5 million and 21.8 million shares outstanding for the purpose of calculating full-year non-GAAP diluted EPS. Full-year U.S. GAAP effective tax rate of approximately 26% to 28%. With that, I'll turn the call back to Nikhil.

Thank you, Steve. Turning to slide 21, in closing, we are making meaningful progress against our strategic priorities to accelerate our transformation into a leading rare disease company to continue executing in generics and to deploy capital in a disciplined manner. We are very encouraged by the initial demand that our Cortrophin sales force expansion in gout is driving and the momentum of our existing specialties. Overall, we expect to deliver over $1 billion in revenue in 2026, with rare disease approaching 60% of total revenues. We are confident in achieving our 2026 financial guidance, which reflects significant top and bottom line growth. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Vamil Divan with Guggenheim Partners. Your line is open.

Just focusing on Cortrophin here. Can you give a little bit more detail in terms of what you've been seeing so far in terms of the gout uptake? I appreciate the comments you made. I'm just sort of thinking about the way you structured the guidance here. You're going to get about $143 million, $153 million in the third quarter. It's a pretty meaningful step up from there into the fourth quarter. So just try to see what you've seen so far in gout and kind of the confidence it gives you to see the further uptake through the course of the year. And then sort of tied to that also, obviously, a lot of potential patients that Cortrophin can hit across the current indexes as you showed on the 1 slide here. Can you maybe just give us a sense of how penetrated you think some of these current indications are? Again, just trying to get a sense in terms of obviously there's a big runway ahead of you, but trying to get a sense of how far you've penetrated them to get a sense of what maybe is left to penetrate them.

Yes. Good morning, Vamil, and thank you for your questions. I think your first question is on the gout expansion. So as we said, the leading indicators from the gout expansion are very positive, right? What we're seeing is the, you know, so first of all, you know, our gout-focused organization expansion was fully operational by the end of June as expected. And then the leading indicators of demand that we've pointed out are, which we're pleased with, is the breadth and the depth of the prescribing, right? So over 95% of the reps generated multiple new patient cases. Over 1/3 of the prescribers have initiated 2 or more cases. And we also saw balanced demand between primary care and podiatrists. We also see continued success and growth in the territories that were the 10 pilot territories that we had, which based on whose success we actually thought about the gout expansion.

So I think all of those very pleased with the progress and the leading indicators of demand that we've pointed out for the gout extension. Now, when it comes to guidance, you know, Steve pointed out that our Q3 guidance for Cortrophin is $143 million to $153 million, and then, you know, your question was around the step up from there. So when you think about the gout expansion, right, we've executed our largest rare disease sales force expansion and we've increased our reps by 50%. This expansion from 120 to 180 reps, right? So that's a meaningful expansion. That expansion was operational by the end of June. I already spoke about the leading indicators of demand. So we expect Q3 to keep building on this momentum and therefore Q4 will have significantly higher impact from the gout expansion.

In parallel, our existing specialties, which were the primary drivers of growth for the 56% quarter on quarter growth in 2Q, and have continued the momentum in 3Q with the highest number of new cases initiated in July, that also has continued momentum. And then lastly, that Q4 also benefits from the typical channel and insurance dynamics acting as tailwinds. So finally, as a reference point in 2025 to where we did a sales force expansion, revenue contribution from H2 was 61% of the total. And then, you know, just again, as the reference point, the expansion in 2026 is 3x the expansion in 2025 in terms of number of reps and was completed in the second quarter versus the first quarter in 2025. And then lastly, your question was on penetration across the addressable market. It's very low, very, very low, and so there is a huge opportunity, and we continue to believe in the strong multi-year growth opportunity for Cortrophin and are investing in multiple ways to capture that opportunity and to most importantly, you know, be true to our purpose of serving patients, improving lives. Thank you, Vamil.

Thank you. Our next question comes from Glenn Santangelo with Barclays. Your line is open.

Hey, Nikhil, at the beginning of the year, you called out all these prior authorization re-verification issues that would impact 1Q. But then on May 8th, when you reported 1Q, said that this was kind of behind the company, you know, this quarter you're talking about the early progress of your sales force expansion, the early success in gout, but yet you come in light and you sort of trim in the guide for the year. And so I just want to try to get your sense for how the months have progressed and how you know the insurance re-verification issues have progressed and is that playing a role here in the second quarter because you know what we find a little perplexing is the disconnect between the IQVIA data and what you're reporting. And so I'm kind of curious if we have a situation where scripts are getting written but not approved. Any sort of details around sort of how the first half played out from 1Q to 2Q would be helpful.

Yes. Good morning, Glenn, and thank you for your question. First is on the insurance re-verification, which impacted the performance in the first quarter. That issue is behind us and there's no impact from insurance re-verifications in the Q2 number. And then to level set here, we did make our guidance range for the quarter, achieving the 56% growth and 43% year over year growth in Q2 and are proud of the progress we made. And there are a diverse range of inputs that drives our guidance, right? Such as number of cases initiated, the indication mix, patient pull-through, payer type, and other such factors. And then, you know, in terms of momentum, right, going into Q2 and, you know, obviously we're sharing Q3 data too, the growth came in Q2 came primarily from existing specialties.

And the momentum has continued into the third quarter from existing specialties itself. We have the highest month of new patient cases initiated in July. As expected and as previously discussed, given the timing of operationalizing our gout expansion, it did not have a meaningful impact on Q2 reported revenues, but we continue to expect measurable revenues in the third quarter and robust growth in the fourth quarter, and we're giving, you know, metrics on the indicators of demand, right? That are already laid out. And so our expectation for Q3 and Q4 hinges on both the continued momentum in the existing gout, as well as the very positive early feedback from the gout launch where we have over 95% of our team has generated multiple new cases and over 1/3 of our prescribers have initiated 2 or more cases. And we continue to have success going to prescribers who are naive to ACTH, right? Over the history of us commercializing Cortrophin, over half of our prescribers were naive to ACTH and began using ACTH to serve patients. With the linkage to IQVIA and the question around that, while the IQVIA data has historically provided directional insights on revenues, we also know that there is a lot of volatility in the data, and it has over or understated quarterly revenues in the past. That's really all we have to say about the IQVIA data.

We understand that to be helpful to investors, we have been providing to investors many of our key internal metrics, such as next quarter's revenue guidance or various demand metrics from July in the first month of the current quarter. Thank you, Glenn.

Thank you. Our next question comes from Dennis Ding with Jefferies. Your line is open.

We have 2 on the Cortrophin guidance. So, #1, you know, what factors didn't play out to your expectations that has driven the guidance revision? Because you guys landed, you know, within your Q1 and Q2 [ SOF ] guidance, but then lower 2026 by about $30 million. I'm just curious, did early Q3 demand perhaps not meet your expectations or maybe you're seeing incremental headwinds on access? As we've seen a couple of other spec pharma companies flag additional step edits and things even though they're in other therapeutic areas. So that's question #1. And then question #2 is that, you know, your guidance also assumes a pretty big step up in Q4. But if I look at last year, that was actually the slowest sequential step up that Cortrophin had. So I'm just wondering, you know, what gives you the confidence that Q4 would play out as expected, appreciating that the gout expansion is happening and is accelerating.

Good morning and thank you for your questions, Dennis. So, you know, our revised guidance, accounts for the actual performance in the first half and largely maintains our expectations for both the existing specialties and the gout expansion in the back half. We expect to deliver 50% to 55% year over year growth, right? For Cortrophin to $520 million to $540 million in Cortrophin net revenue for the full year. And importantly, Cortrophin has a strong multi-year growth opportunity driven by the large significantly underpenetrated almost 1 million patients that we estimate as our addressable market. And we continue to see momentum across both our existing specialties and from the gout expansion. You asked about Q3 metrics, right? In existing specialties, highest number of new cases initiated in July. In the gout expansion, 95% of the reps, right, an expansion that was operational at the end of June, 95% of reps fully operational at the end of June. 95% of reps have initiated 2 or more cases. 1/3 of our prescribers have written 2 or more cases.

So we are seeing very strong demand generation and very positive demand generation, which is on track or ahead on metrics that we have week on week, we're continuing to see that momentum. We do not see any additional headwinds in the back half of the year, and our, very importantly, our expectations for the back half of the year are largely intact with what we had originally anticipated at the start of the year, right? So the revised guidance is simply taking into account the actual results from the first half. And then you asked about the question on the step up in Q4. I think the big difference with last year is, we have an expansion that's 3x the previous year's expansion, right? That's fully operational at the end of June. So these reps will have been out, you know, 3 months in Q3, but then you'll have a full quarter and, you know, most reps will be out between 3 to 5 months when you get to the fourth quarter. So you'll see a much bigger impact from the gout expansion in the fourth quarter. Thank you, Dennis.

Okay, got it. And if I can have a quick follow-up. So on the dedicated gout expansion, can you comment on how many flares have been treated so far? Because based on some of your comments, I mean, you guys had 65 dedicated gout reps. You said 95% of them had multiple new cases. So if you have conservatively assumed 2 cases each, maybe that's 125 patients or flares from the end of June to the end of July. So that's about a month. And that's going to ramp up through the year. Do you think those are fair assumptions?

Yes. Thank you, Dennis, for your question. Look, we're trying to give as many internal metrics to be helpful to investors, but we are not at this point sharing flares per rep or number of cases per rep, because as I said, there are many factors that drive our guidance, and so I'll keep it at that. Thank you, Dennis.

Thank you. Our next question comes from David Amsellem with Piper Sandler. Your line is open.

Just wanted to clarify, Nikhil, are cases the same as prescriptions written? And if they're not, can you talk about how many of those cases that you referred to, a percentage of those cases, are actually becoming active prescriptions written? That's #1. Number 2, as you think about the ramp in the back half of the year. How long does it take on average to get a script filled from when it was written? Are you seeing any significant lags there that could be or have been problematic just beyond the authorization issues that you cited earlier this year? And then lastly, operating leverage. With the expansion in place, how are you thinking about operating leverage beyond this year? Do you think you're going to need further sales force expansion to support the gout indication or other indications? Just generally speaking, if you can talk about that as well that would be helpful.

Good morning and thank you, David. So when we say new cases initiated, we mean prescriptions, we mean the same thing as enrollments, enrollment forms. So when we say you know number, highest number of new cases initiated for existing specialties in the month of July, then that means the highest number of enrollment forms or prescriptions that were written in July. And the same thing when we talked about, from the gout expansion, the leading indicators is demand. There are 1/3 of our prescribers have written more than 2 prescriptions, meaning intent to treat more than 2 enrollment forms and initiated new cases initiated. So new cases initiated is the terminology we use so that's 1. The second on time to, you know, from the time of the enrollment or the new case initiation to fulfillment that time varies. It varies on a number of different factors. It can be in a matter of a couple of days to weeks, and it depends on the payer type, the patient, the physician's office.

I think it's a number of different factors that drives it. I think importantly, we're in year 5 of our launch, right? And we have consistently across the 5 years kept improving this process to support prescribers and prescriber offices and patients who are appropriate for ACTH and Cortrophin therapy to get the medication that they need in time. So there is no lag or any new headwind that we're facing on that front. We continue to work with the prescriber's office and in the appropriate fashion to ensure that these enrollments end up with patients on therapy. And then the third question was on operating leverage. Absolutely, David. The investment that we've made in this year by expanding our rare disease sales force by about 50% from 120 reps to 180 reps, we'll see impact in the back half, but we'll see the full year impact and operating leverage in 2027. And so you can expect higher sales in 2027 and operating leverage from the investment made this year.

Thank you. Our next question comes from [ Ekaterina Neyskova ] with J.P. Morgan. Your line is open.

I just want to go back to the patient re-verification issue. What percent of the volumes that you lost in Q1 were you eventually able to recover in Q2 versus how much of that volume was permanently lost? And similar kind of line of questioning, but should we expect a similar issue as we kind of think about '27? And then the next topic I wanted to talk about is just also Cortrophin Gel trends that you're seeing in terms of vial per patient. Just any big shifts in terms of the number of vials you're kind of seeing each patient use.

Got it. Good morning and thank you, [ Ekaterina ], for your questions. First question is on, I'll take a second question first, which is on the vials or the usage per patient. The usage per patient varies across indications and prescribers. So we are not seeing any significant if the mix of indications we have is there are some indications for which there's a higher usage per patient and there are some indications where there's a lower usage per patient, whatever the prescriber feels is appropriate for the patient. So we're not seeing any specific change in any indication of that, of the usage per patient. And then going back to your re-verification question. Look, we worked through the re-verification issues, and again, just to remind investors, there was a large bolus of patients that needed to be re-verified, that patients who were on therapy on December 31, 2025 and needed to be re-verified in 2026 early as part of their insurance process.

And because of the large bolus as well as weather-related issues, it took a bit more time. Now, we were able to convert many or most of those patients through the re-verification process, right? And there was some shifting of that in the timing of that that happened. Did we lose some patients? Yes, but that's also, you know, patient pull-through, this is also consistent with what has happened the previous year. So there's not, you know, an additional impact that we're seeing from that.

Thank you. Our next question comes from Gary Nachman with Canaccord Genuity. Your line is open.

What portion of Cortrophin volume was from gouty arthritis flares in 2Q versus 1Q? If you could quantify that, it would be helpful. And maybe where do you see that going by the end of the year? And then just following up on the last usage question, within gouty flares, is the revenue per patient a bit lower? So assuming you need a lot more of those patients on a relative basis, I'm curious if that's a definite dynamic to consider with the revenue as the mix is going to shift going forward. And then, you know, any anticipated pressure in gross to net at all that might be impacting the revenue based on the dynamics that you're seeing in the space, including with your competitor.

Got it. So good morning and thank you for your questions, Gary. I think your first question on what contribution of gout. So, you know, I'll speak to existing specialties where you remember that even we have spoken about gout being about 18% of our sales as we were reporting in the past, right? So, that's what gout was giving from existing specialty rheumatology and nephrology and from the pilot territories. That's the last number that we've shared. In Q2, from the gout expansion, where we've had this expanded sales force that goes into primary care and podiatry, we had limited impact in the second quarter in revenues, and this was as expected. We obviously will expect to see a ramp in Q3 and then a much bigger ramp in Q4 on sales from that. So gout as a percentage of sales across existing specialty and from the gout expansion will increase from that 18%.

But as I've said, there's 750,000 patients in the other specialties, right? Which we believe is the under-penetrated and that are significantly under-penetrated, right? So this is ex-gout, so 1 million patients including gout, but 750,000 patients ex-gout, and there is a significant growth opportunity there. So, you know, that will keep growing, right, and we'll keep investing to capture that growth in the non-gout areas too. So at this point, we're not projecting, you know, what's the gout mix of the business going to be going forward. Your second question was on the gout number of vials per patient. Yes, the gout number of vials per patient is lower, or number of PFS per patient is, or mLs per patient is lower, but then there's a lot more gout patients. And even when you think of, you know, the prescribers that we go to, the number of patients prescriber are seeing, our experience has been through the 10 territories where we did the pilots as well as in the expansion that we've, in the first few weeks of the expansion, that the number of patients that are suffering from acute gouty arthritis flares and who the prescribers believe are appropriate to consider for a new treatment option such as Cortrophin, is a larger number, right, just on a per office basis.

So we'll see more patients and there'll be less usage per patient. So we think of it that way. And then the third question on the gross to net. There is nothing to highlight here. We obviously try to strike a balance with, as you refer to our competitor, between sharing information that is competitively sensitive with information that is helpful to investors. So, you know, nothing new to share at this time.

Okay, great. Just a follow-up on David's operating leverage question. So, just how aggressive are you at this point, you know, looking to expand the rare disease business through M&A and what kind of assets are you looking for? So, I guess, how important is to further leverage the increased sales force, I guess, particularly in podiatry and primary care? Is that going to be a focus, or do you not want to mess with that because you need to focus on the Cortrophin growth? So just, you know, your latest thoughts on the importance of M&A at this point in rare disease.

Yes. So, disciplined capital allocation is a critical path of our success story and plans going forward. And executing M&A to expand the scope and scale of our rare disease business is a top priority from a capital allocation perspective and where do we plan to invest or where we've been evaluating opportunities very much 2 sets of opportunities. So commercial or near commercial assets that are synergistic either with our call points, right? So, and we have the benefit with Cortrophin having multiple call points. So synergistic with the call points or from a sales force perspective, or leveraging the rest of our infrastructure, right, which is the market access, medical affairs, patient support, you know, a lot of the, which is also a critical part in the rare disease space, you know, so those are the 2 sets of sort of core capabilities that we want to, you know, add assets that are synergistic with that.

Thank you. Our next question comes from Thomas Smith with Leerink Partners. Your line is open.

On the Cortrophin and gout launch, if I may, are there any differences you're seeing in payer mix between these podiatrists and primary care settings versus the base business specialties? And can you just elaborate a little bit on how you're engaging with these new specialties to help them navigate the reimbursement process? And then second, you also called out success and growth coming from these 10 initial pilot territories. Just wondering if you could elaborate and maybe quantify how much of the demand in the quarter came from those territories, and how broadly do you expect the experience within those pilot centers to play out now that you have the sales force expansion fully in place?

Yes, great. Thank you for your question. I think that, you know, to your question on supporting the podiatrists or engaging with the podiatrists and PCP offices, we've taken, you know, we're in year 5 of Cortrophin, and we've engaged with new prescribers along the way, right? Over half of our prescribers are new, or were naive to ACTH, and then we obviously have the learning from the pilots that we did in the middle of last year for the podiatry and PCP. So we've taken all those learnings as we have engaged with the podiatrist and PCP offices, and we have found that on both fronts, both in terms of the engagement and the discussions with the podiatrist and PCPs, as well as in the support that's needed for them our experiences in the gout expansion to date has been pretty consistent.

And then to your end. And so we're continuing to build on that, right? So very positive and very consistent. I think the second question on contribution from the pilot territories, I mean, remember there were 10 territories roughly, and then as we've gone into the expansion, we've had about 64 reps, right? And 95% of them are seeing, have initiated 2 or more cases. So the impact is beyond the, the demand generation is beyond the 10 pilot territories, the momentum is across the entire team.

Thank you. Our next question comes from Brandon Folkes with H.C. Wainwright. Your line is open.

Staying on the Cortrophin guidance, can you just elaborate on the growth of Cortrophin outside of gout, especially those specialties which use a high number of vials per script? Is Cortrophin use declining in any of those specialties? Secondly, you're right. We reiterated Cortrophin guidance in May, but a flag in the first half of the year, the driver of the changing guidance. So can you just elaborate if those drivers of the guidance change arose in May and June of this year? And if so, are they resolved? If it is just timing on the sales force expansion, why don't we see that bump in 3Q? And then just lastly, outside of the gout sales force expansion, what are the other drivers of the 4Q's Cortrophin revenue inspection?

Good morning, Brandon, and thank you for your questions. So the first question is on the existing specialties. We see strong multi-year growth potential across the existing specialties. I mentioned, there's 750,000 addressable patient population outside of the gout specialty, right? So across the key existing specialties, there are 750,000 patients, and we're just, you know, they're significantly underpenetrated. And there continues to be robust momentum across these existing specialties. The Q2 to Q1 growth of 56% quarter-on-quarter and the 43% year-over-year growth was you know essentially achieved by the existing specialties and then the you know are you're seeing, you asked, is there a slowdown? We are not seeing a slowdown across specialties.

In fact, I think one of the things we highlighted is there's a doubling of the ophthalmology volumes year over year, you know, to give you an example. Obviously we're trying to find a balance between sharing information that is helpful information that is competitively sensitive. So we give that as an example. But as far as 3Q goes, the momentum is strong. We gave multiple metrics for July. And especially for existing specialties, we said that there's the highest number of new patient cases initiated in July. And obviously, new patient cases initiated translates to new patient starts, translates to volumes dispensed.

Thank you. I'm showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. First Quarter 2026 Earnings Results Call. Please note this call is being recorded. [Operator Instructions].

It is now my pleasure to turn the conference over to Irina Koffler.

Thank you, Liz. Welcome to ANI Pharmaceuticals First Quarter 2026 Earnings Results Call. This is Irina Koffler, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer; Stephen Carey, Senior Vice President and Chief Financial Officer; and Chris Mutz, Senior Vice President and Head of ANI's Rare Disease Business. You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com. This call is accompanied by a slide deck that can be accessed by going to the Events section of the Investors page of our website.

You can turn to our forward-looking statements on Slide 2. Before we begin, I would like to remind everyone that some statements we make today may be considered forward-looking statements, as defined by the Private Securities Litigation Reform Act. ANI cautions that these forward-looking statements are subject to risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC that may cause actual results to differ materially from those projected in the forward-looking statements. ANI specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.

During this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as an alternative to financial measures required by GAAP. The non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available in the slide deck accompanying this call. The archived webcast will be available for 30 days on our website, anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on May 8, 2026. Since then, ANI may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to Nikhil Lalwani.

Thank you, Irina, and welcome again to ANI. Good morning, everyone, and thank you for joining us for ANI's First Quarter 2026 Earnings Call.

Starting on Slide 4. In the first quarter, we continued to deliver on our goal of accelerating our transformation into a leading Rare Disease company and meaningfully further our commitment to serving patients, improving lives. Specifically, in the first quarter, we grew total net revenues 20% year-over-year, driven by strong performance across our Rare Disease and Generics businesses, along with contributions from an innovative intellectual property out-licensing agreement that will provide us with royalty revenues for years going forward. We also grew adjusted EBITDA 24% year-over-year while making strategic investments into our Rare Disease business to accelerate its growth. These strong first quarter results enabled us to raise our 2026 financial guidance for total revenue to the range of $1.08 billion to $1.14 billion, and adjusted EBITDA to the range of $285 million to $300 million. I'm highly encouraged by our first quarter performance, which positions us well to drive meaningful growth in 2026 and beyond.

Turning to Slide 5. Earlier this year, we outlined top 3 priorities for 2026, and I'm proud of all of the hard work our team has put in to generate strong momentum as we execute against these priorities. The first priority is to accelerate our transformation into a leading Rare Disease company. Central to this effort is maximizing the multiyear growth opportunity for Cortrophin Gel, our lead Rare Disease asset. We delivered $75.1 million in Cortrophin Gel net revenues for the first quarter, up 42% year-over-year and consistent with the expectations we outlined during our last quarterly call. The fundamentals remain strong, and we exited the quarter with clear traction across our target indications. We saw accelerating momentum across our new patient starts and monthly volumes dispensed in February and March. This momentum has persisted in the second quarter with April having the highest number of new patient starts and monthly volumes dispensed since launch.

We have also made significant strides this quarter in expanding our Rare Disease organization to capture the sizable and unique opportunity in acute gouty arthritis flares by targeting podiatry and primary care. We have recently hired and onboarded the majority of our new dedicated commercial team, who will be in the field in the second quarter. We expect to have our full organizational expansion completed and operational by the end of June. This, together with the continued strong demand across other core indications, provides a solid foundation to drive significant revenue growth in the back half of the year. We believe we are well positioned to achieve our 2026 guidance of $540 million to $575 million in Cortrophin Gel revenues.

For ILUVIEN, we delivered $19.3 million of revenue in the first quarter, up 20% year-over-year, as we continue to execute on the commercial and patient access initiatives we established in 2025. In particular, we made meaningful progress on generating and sharing clinical data with the retina community, including our recent publication of NEW DAY results in DME. We're also on track to announce results from the Phase IV SYNCHRONICITY clinical trial in NIU-PS at a medical conference in the third quarter of 2026. Over the long term, we continue to believe the addressable patient populations in DME and NIU-PS represent at least 10x the number of patients treated with ILUVIEN today, representing a significant and durable opportunity for value creation.

Turning to Slide 6. We entered into a transaction with Harmony Biosciences, under which we exclusively licensed certain intellectual property to Harmony, which expands its intellectual property estate for pitolisant. In addition, we provided Harmony a co-exclusive license with which Harmony and Novitium, a subsidiary of ANI, intend to develop a novel formulation of pitolisant in broad CNS indications. In the first quarter, we received a $15 million upfront license fee. Additionally, we have the potential to receive an additional $10 million milestone payment upon achievement of certain development milestones, and expect these development milestones to be achieved in the second and third quarters of 2026. We will also receive low single-digit royalties on pitolisant-based products. Harmony's guidance has WAKIX delivering net revenues of $1 billion to $1.04 billion in 2026.

Turning to Slide 7. Our second priority is continued execution in our Generics business by leveraging our superior R&D capabilities, operational execution and U.S.-based manufacturing footprint as well as maintaining our current cadence of 10 to 15 launches annually. Similar to our Rare Disease franchise, we are able to report meaningful progress on this front. Year-to-date, we have already launched 6 new Generics products and continue holding our position as the #2 player in overall CGT approvals.

Our third priority is managing a disciplined capital allocation strategy. We continue to explore inorganic opportunities to expand the scope and scale of our Rare Disease business. We are also focused on driving organic growth by investing in our dedicated organization for Cortrophin in acute gouty arthritis flares and investing a high single-digit percentage of Generics revenues into Generics R&D. Our confidence in the business is further evidenced by our new $100 million share repurchase program authorized by our Board.

Turning to Slide 8. We are encouraged by our first quarter performance and the important progress we've made against our strategic priorities. We are seeing strong momentum coming out of the quarter and are well positioned to achieve our newly raised 2026 financial guidance. In 2026, we expect to deliver over $1 billion in revenue, representing 26% growth over 2025, at the midpoint of our guidance range, and Rare Disease is expected to account for approximately 60% of our total revenues in 2026 with Cortrophin Gel growing 60% year-over-year. We also expect to expand the bottom line with adjusted EBITDA forecasted to grow 27% year-over-year. Our balance sheet is healthy with the capacity to support future business development opportunities to expand scope and scale of our Rare Disease business.

With all of this recent progress, we are continuing our virtuous cycle of growth with which our Generics and Brands businesses generate meaningful cash flows to support our Rare Disease business as we accelerate our transformation into a leading Rare Disease company.

I'll now turn the call over to Chris to discuss our Rare Disease business in more detail. Chris?

Thank you, Nikhil, and good morning, everyone. Starting with Slide 9. Cortrophin grew 42% year-over-year to $75.1 million, in line with our expectations in the first quarter. We drove momentum across our underpenetrated specialty indications and made significant progress on our organizational expansion to capture the unique opportunity in acute gouty arthritis flares.

As a reminder, consistent with prior years and typical industry dynamics, Cortrophin's performance in the first quarter reflected seasonality primarily related to the impact of insurance reverifications. In the first half of the quarter, insurance reverifications took slightly longer to clear as compared to the prior year due to increased Cortrophin patient volumes in the physician offices and in some parts of the country due to weather-related physician office closures that temporarily delayed the reverification process. As physician offices worked through the reverification backlog, Cortrophin sales began to ramp back up. In fact, we saw an acceleration in February and March, which carried into April. April achieved the highest number of new patient starts and monthly volumes dispensed since launch.

We are also pleased with the underlying fundamentals. We delivered year-over-year growth across all of our targeted specialties of rheumatology, nephrology, neurology, pulmonology, and ophthalmology. Prescribing for Cortrophin Gel in acute gouty arthritis flares remained a key driver this quarter. This indication is unique to Cortrophin Gel among ACTH therapies and represented approximately 18% of total utilization. We also continue to realize meaningful revenue synergies in ophthalmology with first quarter Cortrophin volumes in ophthalmology doubling over the same period a year ago. I'm proud of our commercial team's execution this quarter that positions us for significant growth in 2026.

To capture the multiyear growth potential of Cortrophin Gel, we continue to focus on 3 key strategic priorities: high ROI commercial initiatives, investment to generate robust clinical evidence to support physician decision-making and confidence in Cortrophin Gel, and enhancing patient convenience. I want to focus my comments today on our investments in high ROI commercial initiatives.

Turning to Slide 10. Building on the commercial expansion we executed in 2025, and following a successful pilot program, we are taking the next step to capture the unique opportunity for Cortrophin Gel in acute gouty arthritis flares with our new 90-person dedicated organization targeting primary care and podiatry. The majority of our commercial team has been recently hired and onboarded. They will be in the field and meaningfully engaging with prescriber targets in the back half of the second quarter. Further, our sales team is equipped with new promotional materials focused on acute gouty arthritis flares that we believe will assist significantly with our educational efforts. We expect to have the full team deployed by the end of the second quarter, focusing on the 7,000 HCPs that treat the most severe patients outside of our prior call points in rheumatology and nephrology.

While we anticipate the expansion to begin impacting Cortrophin Gel volumes in the second half of 2026, we expect a greater impact in 2027, as the team reaches full productivity. There are several reasons why we are confident about the opportunity in acute gouty arthritis flares. First, it represents a significantly underpenetrated market opportunity. There are roughly 10 million patients in the U.S. with gout, about 36% receive treatment annually. They have 1.5 to 2 flares on average per year, and only 8% of those patients receive an injectable flare treatment.

This group of 285,000 patients represents our addressable patient population and a majority of them are treated in settings called on by our new team. Second, Cortrophin is the only approved ACTH therapy for acute gouty arthritis flares. Third, we have a proven track record in this indication. Prescribing for acute gouty arthritis flares represents approximately 18% of Cortrophin Gel use to date, driven primarily by use in rheumatology and nephrology. Last year, we ran successful pilots across 10 territories in primary care and podiatry, and we continue to see momentum in these territories. This data gave us further confidence to expand our organization to capture the broader opportunity in gout.

Finally, our organization build-out further enables us to continue expanding the ACTH market, which is pictured on Slide 11. Already, prescribers who were previously naive to ACTH represent approximately half of our total Cortrophin Gel prescriber base, and this cohort will continue to grow. The ACTH market is expected to reach over $1.3 billion in sales in 2026 with Cortrophin expected to grow 55% to 65% year-over-year.

On Slide 12, turning to our retina franchise. We're advancing several initiatives to support ILUVIEN sales. We're committed to generating clinical data for the overall retina community. We're pleased that last month, the results of our NEW DAY study of ILUVIEN in patients with DME were published in Ophthalmology, a leading globally respected peer-reviewed journal. We also expect to share results from our SYNCHRONICITY Phase IV study of YUTIQ now promoted under the ILUVIEN label in chronic NIU-PS at a medical meeting in the third quarter.

In addition, our commercial team is focused on educating and engaging the retina community, and they are conducting peer-to-peer educational programs and field activities with updated marketing materials to enhance physician understanding of ILUVIEN and its 2 indications. We also continue to work with physician practices as they navigate ongoing Medicare market access challenges that have persisted since January 2025, including exploring alternate access pathways.

I'm proud of all of the progress our team made this quarter and believe we are well positioned to accelerate our transformation into a leading Rare Disease company.

With that, I will now turn the call over to Steve to detail our financials.

Thanks, Chris, and good morning to everyone on the call. I'll now review our first quarter results and 2026 guidance in more detail. Starting with Slide 13. ANI total net revenues were $237.5 million in the first quarter, up 20% over the prior year period. Revenues from Cortrophin Gel in the first quarter were $75.1 million, up 42% from the prior year period, performing in line with our expectations. As Chris noted, first quarter 2026 results were impacted by seasonality related to the impact of insurance reverifications that took slightly longer to clear in January and February. ILUVIEN net revenues were $19.3 million in the first quarter, up 20% from the prior year period.

As Nikhil mentioned, in January, we entered into a licensing transaction with Harmony Biosciences. We recognized $21.5 million of associated revenues in the first quarter, consisting of the $15 million upfront license fee and the initial royalty income on sales of WAKIX. Revenues from Generics in the first quarter were $105.4 million, an increase of 7% over the prior year, driven by the continued strength in the partnered generic launch that commenced in the third quarter of 2025, contribution from new product launches, and commercial and operational outperformance.

Turning to Slide 14. Non-GAAP cost of sales increased 28% to $93.1 million in the first quarter of 2026 compared to the prior year period, primarily due to net growth in sales volumes and significant growth of royalty-bearing products. Non-GAAP gross margin in the first quarter was 60.8%, a decrease of approximately 230 basis points from the prior year period, principally due to higher sales of royalty-bearing products, including Cortrophin Gel, the partnered generic product launch that occurred in the third quarter of 2025, the nonrecurrence of prior year revenues from Prucalopride, as well as lower brand sales year-over-year. These effects were somewhat tempered by the initial revenue recognition under the Harmony agreement.

Non-GAAP research and development expenses were $10 million in the first quarter, essentially flat with the prior year period. Non-GAAP selling, general and administrative expenses increased 12% to $71.4 million in the first quarter, driven by initial marketing and recruitment expenses for our organizational expansion for Cortrophin in acute gouty arthritis flares, as well as an overall increase in activities to support the ongoing significant growth of our business. Adjusted non-GAAP diluted earnings per share was $2.05 for the first quarter compared to $1.70 per share in the prior year period. Adjusted non-GAAP EBITDA for the first quarter was $63 million, up 24% compared to the prior year period.

We ended the first quarter with $311.2 million in unrestricted cash, up $25.6 million as compared to $285.6 million as of the December 31, 2025 balance sheet. Cash flow from operations was $58.4 million in the first quarter. As of March 31, 2026, we had $625 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the first quarter, our gross leverage was 2.6x, and our net leverage was 1.3x our trailing 12 months adjusted non-GAAP EBITDA of $242 million. Driven by first quarter performance, we are pleased to raise our 2026 financial guidance for total net revenue, adjusted non-GAAP EBITDA, and adjusted non-GAAP EPS, which reflects significant top and bottom line growth.

Our guidance outlined on Slide 15 is as follows: We now expect 2026 net revenue of $1.08 billion to $1.14 billion, up $25 million from previous guidance. We are reaffirming our guidance for Cortrophin Gel net revenue of $540 million to $575 million. And from a quarterly cadence perspective, we expect second quarter Cortrophin Gel revenues to represent approximately 21% to 23% of total 2026 Cortrophin revenues. We then expect further sequential gains in the third and fourth quarters, driven by continued performance of our portfolio, pulmonology and ophthalmology teams in addition to the full deployment of our commercial organization focused on acute gouty arthritis flares. Revenues associated with this expansion will first occur late in the second quarter and are expected to build momentum throughout the second half of the year.

We are reaffirming our ILUVIEN net revenue guidance of $78 million to $83 million. And we now expect non-GAAP adjusted EBITDA of $285 million to $300 million, up $10 million from our previous guidance. From a quarterly cadence perspective, we expect second quarter non-GAAP EBITDA to be essentially in line with first quarter as the increase in Cortrophin Gel revenues will be tempered by the nonrecurrence of the $15 million upfront license fee recognized in the first quarter. We then expect strong sequential growth in adjusted non-GAAP EBITDA in the third and fourth quarters driven by Cortrophin Gel revenue gains. We now expect adjusted non-GAAP earnings per share between $9.19 and $9.69.

We are also adjusting upward gross margin expectations and expect adjusted gross margin to be 59.9% to 60.9% in 2026, up 60 bps from our previous guidance. We continue to anticipate between 21.5 million and 21.8 million shares outstanding for the purpose of calculating full year non-GAAP diluted EPS and a full year U.S. GAAP effective tax rate of approximately 26% to 28%. Finally, we are pleased to announce a new 3-year share repurchase program to repurchase up to $100 million in common stock. This reflects the strength of our balance sheet and our ongoing confidence in the business. This program provides us with another tool in our capital allocation strategy, which is centered on creating long-term value for our shareholders.

With that, I'll turn the call back to Nikhil.

Thank you, Steve. Turning to Slide 16. In closing, we are making meaningful progress against our strategic priorities to accelerate our transformation into a leading Rare Disease company, continuing to execute in Generics and deploying capital in a disciplined manner. Overall, we expect to deliver over $1 billion in revenue in '26 with Rare Disease representing approximately 60% of total revenues. We are on track to achieve our raised 2026 financial guidance, which reflects significant top and bottom line growth.

Operator, please open up the line for questions.

[Operator Instructions] Our first question comes from David Amsellem with Piper Sandler.

So I just have a couple. First, on the mix for Cortrophin. Can you talk to how much of your growth is coming from the non-gout settings like pulmonology/sarcoidosis and ophthalmology? And how much of the mix is in those other high-growth settings other than gout? So that's number one.

And then also, I wanted to drill down on number of vials and duration of treatment in the various indications. My understanding is that in gout, it's a pretty short course. Pulmonology, ophthalmology, others, there's more vials, there's more duration. So help us better understand those dynamics. And then last question is on payer access. As you gain more and more of a footprint overall and particularly in gout, can you talk about how access dynamics might evolve?

Yes. Thank you, David. So your first question is where is the growth coming from? Our previous year sales was $348 million, and our guidance for this year is $540 million to $575 million. So that's growth of approximately 60%. Majority of that growth comes from what I would refer to as core indications are the ones that we have been focusing on since launch, which is rheumatology, nephrology, neurology, pulmonology and ophthalmology. And there is acute gouty arthritis flares as part of that, but coming from the prescribers being rheumatologists and nephrologists.

Now when you think about the gout expansion that we've done this year, as Chris mentioned in his remarks, the team is pretty much hired and trained and is going to be in the field starting in the back half of this quarter. So you'll see some revenue impact in this quarter, but it will really ramp up towards Q3, Q4. But there's a much greater impact that's going to happen in 2027 from this expansion that we've done of a dedicated commercial organization for acute gouty arthritis flares, targeting primary care and podiatry.

So to summarize again, majority of that growth from $347 million going to $540 million to $575 million will come from our core indications and with our prescribers with those core indications. And then there's a subset of the growth that is coming from the gout expansion that we're doing this year. We'll see the full-scale impact and operating leverage in '27. So that's the answer to question one.

Regarding the vials by different therapeutic areas and indications. You're absolutely right that there is a variance. Cortrophin is prescribed across specialties, and there is specialties like pulmonology and nephrology that have higher vials or PFS per patient. And then there is multiple sclerosis, gout, which have lower vials per flare. And I would just remind that in some cases, the patients do come back and they may have used Cortrophin a couple of years ago, but then will come back the next time an exacerbation or a flare comes up. So that's a bit of the color that we can give you on vials or duration. across indications. And obviously, there's a continuum there across different specialties and different indications.

And then on third is payer access. We brought competition to a category that had no competition in ACTH when we launched in 2022, and have been focused on expanding access and serving the significantly underpenetrated addressable market across indications. And what you'll see with the 30% growth implied in our and our competitors' guidance is that we're both focused on reaching the patients for who ACTH therapy is appropriate, and expanding the access as we are doing that. I'm trying to keep it a bit general because as you would expect, there's stuff that is competitively sensitive that we need to just balance while sharing information that's helpful for investors. So thank you, David.

Our next question comes from Vamil Divan with Guggenheim Partners.

So I guess I have a couple of questions related to the guidance increase. And I guess, ties into the Harmony deal. So just to confirm, it sounds like you already recognized $15 million upfront license fee. So I'm assuming that's already included in your guidance expectations. And then there's this $10 million in development milestones that you're expecting in 2Q and 3Q. So my question is, is that already included in your guidance as well? If it is, then that sort of accounts for the $25 million guidance raise for the company as a whole. So I'm wondering how you're thinking about the royalties that you'd get on top of that. Is that included in your guidance? Because if that is, I'd almost wonder why the guidance and especially the EBITDA guidance maybe is not going up by more given the impact of this acquisition?

And then my second question -- sorry, that was a little bit of a long question. The second one is on Cortrophin. I understand the reauthorizations took longer than expected in the first half of the first quarter. But the prescription data that we're seeing publicly through IQVIA, those sources still looked very, very strong. So I'm just wondering if you can maybe help explain the disconnect there, because I would think that if the reauthorizations are taking longer, it would lead through in terms of the prescription data, but maybe it doesn't and maybe I'm wrong on that. So if you can just clarify how we should think about interpreting any of the publicly available prescription data?

Sure. So thank you, Vamil. So I'll take your second on Cortrophin and the IQVIA first, and then I'll come back to the guidance. So look, in the past, IQVIA has been directionally in line with our performance. However, we can't comment on the recent disconnect as it is third-party data, and we do not have insight into all their inputs. And that's why what we've tried to do is share internal metrics that are useful for investors, right? And as you would expect, operationally, we remain focused on our internal metrics and leading indicators we use to manage the business while obviously watching the external metrics, too.

And what we have shared, right, is that we exited the quarter and began Q2 with significant momentum across our target indications. We saw accelerating momentum across monthly volumes dispensed and new patient starts in February and March, and we've spoken to some of that when we reported in February. And then this momentum has persisted in the second quarter with April having the highest number of new patient starts and monthly volumes dispensed since launch. So that's the answer on Cortrophin and related to the IQVIA clarification that you had sought.

And then on the guidance, look, our guidance included, when we had issued the guidance, it included the Harmony deal, right? So our initial guidance, which we issued in January, included Cortrophin at $540 million to $575 million, ILUVIEN at $78 million to $83 million, revenues from the out-licensing agreement, gross margin at 59.3% to 60.3%, and adjusted EBITDA at $275 million to $290 million. Our newly raised '26 guidance retains Cortrophin and ILUVIEN revenue guidance. And so for the guidance increase, it's really driven by high Generics revenues on the back of first quarter and visibility into new product launches for the rest of the year. That's one.

Second is clarity around the milestone achievement of the $10 million, the development milestones that is there in the Harmony agreement. So we have more clarity around when that can be achieved. And I think Steve had spoken that, that will be achieved in the second and third quarter, that $10 million will be achieved across the second and third quarter of this year. And third is just refinement of the royalty revenues expected for this year based on the updated 2026 guidance issued by Harmony.

Our next question comes from Dennis Ding with Jefferies.

Congrats on a very good Q1. So on the Q2 soft guidance, it seems to imply $117 million to $128 million for Cortrophin at the midpoint. Maybe talk about the pushes and pulls on that number and what's driving your confidence today in achieving that? And how much visibility do you have on orders over the next 45 days? That's question one.

And then question number two, if I think about Cortrophin guidance for the year, I feel like what I'm really trying to get comfortable with is maybe around an incremental $50 million in second half gout revenue. When I do the math, that implies around, let's say, 1,500 to 2,000 flares that need to be treated in the second half, but you're also going after 7,000 HCPs. So maybe only a small proportion then just needs to treat a single flare in the second half to bridge the $50 million in gout revenue. Do you agree with that math? Or is there something that we're missing here?

Right. So thank you for your questions, Dennis. So the first question is on the Cortrophin guidance and the quarterly evolution that we spoke to. So look, as we said, we exited the first quarter with significant momentum, right, and saw accelerating momentum across monthly volumes dispensed and new patient starts in February and March. We exited and then began Q2 with significant momentum. We shared that both in terms of volumes dispensed and new patient starts, April is the highest of all time, right? We believe that momentum will sustain, right? And so we are reaffirming our guidance for Cortrophin of $540 million to $575 million.

And then what you have in the third and fourth quarters, right, and this goes back to the first question that I answered for David, is that the third and fourth quarters will have continued performance of our portfolio, pulmonology and ophthalmology teams. And in addition to that is the full deployment of our commercial organization, right? So we have completed that hiring and training, right, for the most part. It will be fully complete by the end of June, right? So the revenues associated with this expansion will first occur late in the second quarter and then are expected to build momentum through the second half of the year, which is in the third quarter and fourth quarter.

I mean, for reference, we're adding 64 new sales reps. And as you're thinking about number of patients and number of enrollments, number of physicians, I think the broader -- I would just zoom out a little bit and say, there are 285,000 patients that we believe are in the addressable market, and we believe that they have an unmet need where Cortrophin Gel may be an appropriate treatment. And they're being treated by physicians that we are currently not reaching. So consistent with our mission of serving patients, improving lives, we've done an investment to reach these patients, first of all, and as a consequence, also expand the ACTH market, because we're reaching a completely new set of prescribers that for the most part, other than those 10 pilots that we had done last year and have seen significant success in and continue to see momentum in this year, we were not really accessing. And so really, this is about reaching that much larger patient population through the expanded sales force.

And again, we remain confident with the addition of 64 reps, right, of seeing momentum build for that in the back half of the year, but also the bulk of the growth from $347 million to $540 million to $575 million coming from the core portfolio of pulmonology and ophthalmology team. And when I say portfolio, I mean reps that detail into nephrology, neurology and rheumatology.

Our next question comes from Glen Santangelo with Barclays.

Nikhil, I just want to follow up on sort of your previous response regarding the guidance. I mean, you're making the case that the licensing fee was included in the original guidance, but it was unclear to me what you were saying about the milestone payments. Were they in the original guidance? Or is that incremental now? I just want to make sure I'm clear on that. And then I had a follow-up.

Yes. I think that when we gave the initial guidance, we take into account -- it took us time to figure out the timing for the development of these -- sorry, for the achievement of the milestone related to the development. So we baked that into the revised guidance. And look, there are multiple factors that are impacting the raised guidance, as I spoke about earlier, right? So there was the higher Generics revenues on the back of first quarter and visibility into new product launches for the rest of the year. The second is the clarity around the achievement of the $10 million development milestones.

And look, we're also retaining some flexibility to invest further across Rare Disease and Generics as we ramp through the year, right? Because we have tremendous growth opportunities across both, right? So we're retaining some flexibility to invest further in the latter part of the year as needed.

So thank you, Glen. And I think you have a follow-up. Please go ahead.

Yes. Maybe I'll shift gears and ask you a quick question on ILUVIEN. Based on your full year guidance and what you sort of did in 1Q, it doesn't seem to be that you're expecting any sort of sequential growth in this product throughout the year. And I was wondering if you could just update us on your sort of commercial and patient access initiatives, because it seems like you're just sort of expecting $20 million a quarter for the balance of the year.

Yes. So thank you for your question, Glen. We've deployed these commercial and patient access initiatives starting towards the end of '25 and heading into '26. And we're seeing the impact from those in a strong Q1. And we're just calibrating, right? As we look ahead, the foundation-related access issues have not resolved. We've obviously made some progress with alternate access pathways for patients that do have the pharmacy benefit. But we're calibrating as we give guidance on what will come towards the rest of the year.

We have a lot to look forward to, right? We spoke about the release of the NEW DAY clinical study results, publishing of that in Ophthalmology as well as in Q3 at a medical conference releasing data on ILUVIEN in NIU-PS, the study is called SYNCHRONICITY. And so there's a number of things that we are working on, initiatives that we're working on, but we're just being calibrated on where the guidance is versus where we started.

Our next question comes from Ekaterina Knyazkova with JPMorgan.

Just wanted to talk about the data generation strategy. Do you think that it makes sense generating additional data in some of the older indications as a kind of way to increase adoption? And if so, what indications do you think would be the most interesting there? And then second question is just on BD, just latest thinking in terms of appetite or priorities for the company.

Thank you, Ekaterina. So in terms of generating scientific and clinical evidence, it's something that we've been focused on right from year 1 of the launch. We've invested in generating preclinical evidence that shows the differentiated mechanism of action of Cortrophin Gel and supports the physician use of Cortrophin. And we're continuing to explore and work collaboratively with physicians to identify areas where we can do that. You obviously know about the Phase IV study that we have in acute gouty arthritis flares.

We've also got other publications we've done in the other indications. And we continue to sort of evaluate and make investments in generating scientific and clinical evidence, and we'll keep you updated. Obviously, there is a competitive angle to this and balancing what we're sharing from a competitively sensitive standpoint. But generating scientific and clinical evidence is an area we're absolutely committed to for Cortrophin and supporting the growth of this franchise.

And then when it comes to BD, it is a critical and important part of our capital allocation strategy. We are exploring ways to expand scope and scale of our Rare Disease business, looking at commercial assets that can leverage either the sales team that we have that go into multiple call points, or the rest of the Rare Disease infrastructure that we have that support market access, specialty pharmacy distribution, patient support, medical affairs, marketing, all of that Rare Disease infrastructure that we have in place that can support us reaching patients in rare indications. So identifying a commercial asset that can leverage these capabilities that ANI has in Rare Disease to expand our scope and scale, we retain our focus on that and is a critical priority for ANI.

Our next question comes from Leszek Sulewski with Truist.

I have three. First, on the reverifications. Can you color -- do you expect any spillover of these lingering into 2Q? Or is it now mostly resolved? And are you aware of the magnitude of these issues among your competitor? And how should we expect similar reoccurrence in Q1 of next year? And then just to clear up on the Harmony settlement, is the royalty tied to all WAKIX sales or just future indications -- or future formulations? And do you have ability to sell this royalty stream? And would you consider going this route? And then just on the buybacks, is there an ASR component to the buybacks? And how should we think about priority of capital allocation strategy?

Yes. So thank you, Les. I'll take the first one, and then I'll hand it over to Steve to answer the one on the share repurchase as well as the Harmony royalties. So the headwinds that we saw related to Q1 seasonality and insurance reverifications taking longer to get through impacted the first half of the quarter. Physician offices have since worked through that backlog, and we saw the accelerating momentum across monthly volumes dispensed and new patient starts in February and March.

I think that as we head into -- to your question on what will happen in '27 Q1. As we get towards the end of the year and into '27 Q1, we will work with the physician offices. And we already have, as we've been working through these insurance reverifications on what can we do to collaborate to make these go smoother, and have identified a set of initiatives that we will deploy, and we would look forward to updating you as we get closer to that time frame. Obviously, there was some impact from the significant weather-related issues in the first half of Q1. That's something obviously that we -- that's mother nature and that will decide. But in terms of the insurance reverification process, we do have ideas that we're exploring and we will implement as we get towards the end of this year and heading into next year to support the physician offices.

And then I'll just turn it over to Steve to answer your question on Harmony royalties as well as the buyback.

Yes. So I'll pick the buy-up one first and Les, thanks for the questions. Just to position the repurchase program a little bit, and then I'll get to your specific question. As we said on the call, putting this in place at this time reflects our confidence in the balance sheet, the cash generation that we've achieved to date with $311 million on the current balance sheet, but our overall confidence in the future prospects of the business, which includes an expectation for significant cash flow generation in 2026.

To be clear, our principal goal for the excess cash on our balance sheet remains to support future business development and M&A. And within that framework, the addition of the buyback program really just gives us another tool in our tool belt as we actively manage the capital allocation plans going forward. Our shareholders should expect us to judiciously allocate cash between investment behind the strategic growth and diversification of the business, delevering our balance sheet and return of any excess capital to shareholders. And to your specific question, Les, at the current time, there is no plan for an ASR to be implemented within this buyback program. Thank you.

And then sorry, on the...

Harmony.

Yes. So on the Harmony royalties, the royalty is due on all pitolisant products, including WAKIX, and any future products that may be introduced that is pitolisant based. And in terms of whether we would sell that royalty stream or not, we typically don't discuss any potential future BD. At the moment, we're just very pleased with the collaboration with Harmony and look forward to executing our portion of that out-licensing deal.

Our next question comes from Brandon Folkes with H.C. Wainwright.

Congrats on a very good quarter. I just want to follow up on an earlier question regarding the prescription growth we're seeing where we sit versus reported revenue on Cortrophin. A few sub-questions here. As the ACTH category grows, are you seeing any additional payer management across the board? And then on Cortrophin again, any changes in rebates or contract terms for 2026 versus 2025? And then lastly, I guess, the level of patient support you provided in 1Q 2026, was that within what you would expect for a first quarter? Is it comparable to the prior year? And are you seeing any change in usage patterns in gout? A lot in there, but I appreciate it.

Brandon, thank you for your question. So your first question on payer management and then your subsequent question on rebates. Look, we try to provide as much information as we can to be useful to investors. But some stuff is competitively sensitive and what's happening on the payer landscape as well as on rebates is competitively sensitive. So we'll not be able to give you specifics there.

What I can say is that our efforts since we've launched is to bring competition to a category that has not had competition and to reach more patients, right? Over half our prescribers are ones that were naive to ACTH and had never considered ACTH before writing their first prescription of Cortrophin Gel. So we're really trying to reach that larger addressable market. And we believe that as with our efforts and also the competitors' efforts, there are more patients that are appropriate for ACTH that are getting access to this therapy, right? So I think that's what I could say in terms of expanding access and having patients access this therapy. So that's on your first 2 questions.

And then with regards to patient support, no, the patient support in 2026 -- sorry, in 2025 Q4 and heading into 2026 Q1 was much more than the patient support that we had in 2024 Q4 going into 2025 Q1, because we obviously knew there were a lot more patients on therapy in 2025 Q4 and that would need insurance reverifications. I believe that's what you were trying to understand. And so we made the expansion of our patient support team. But there are 3 different stakeholders that play a role in insurance reverifications and one of which is the physician offices. So I think that's across the 3 where we had the volumes that went into some of those physician offices and then it was exacerbated by the weather-related delays is what led to the insurance reverification issues.

And then on gout, I think what I could share that would be useful is, gout as a -- acute gouty arthritis flares as a percentage of Cortrophin volumes has grown to 18%, majority of which comes from rheumatology and nephrology, because that's what we were originally focused on. So that obviously is seeing a lot of momentum. And then the cities in which we did the pilots, those territories are also seeing momentum, and that momentum has persisted even after the pilots have concluded. And obviously, some of the pilots have just translated into this new acute gouty arthritis, gout expansion team, and we're continuing to see momentum in that team, too.

Our next question comes from Thomas Smith with Leerink Partners.

On Cortrophin, could you just expand on some of those comments, Nikhil, with respect to the 10 primary care and podiatry centers where you executed the pilot programs last year? Maybe is there a way to quantify, I guess, the potential continued growth and maybe the uptake from those centers now that you're a bit removed from the pilot? And what other learnings could you apply from that experience?

And then on the Harmony licensing transaction, can you just talk about what a potential development path looks like for the novel formulation of pitolisant? Maybe a little bit of color on time lines, how you think about potential value generation from that asset? And then are there other monetizable IP assets in that portfolio that could drive maybe similar transactions here over the next couple of years?

Great. And thank you, Tom, for your questions. So on the pilots, look, we're continuing to see momentum both in new patient starts and volumes dispensed and the momentum is significant, right? And obviously, we keep monitoring that, and that continues to give us confidence in this expansion that we've done. And a lot of our expansion is architected based on what we learned from the pilots, right?

So when you think about how do you identify primary care and podiatrist physicians to reach out to, to reach. So we looked at the success in these pilots and were able to develop a set of criteria from claims data that helped us identify who is the physicians, primary care and podiatrists, which are very large populations, and then really focusing on the 7,000 HCPs that are treating the patients with the most severe acute gouty arthritis flare indications. And so a lot of that has been learning from there.

Second is what is the cadence, right? This is a different prescriber group than the ones that we've been going with initially -- or going to initially with our sales force. And so really learning like, hey, what's the cadence that would be appropriate for them? What is the messaging that's appropriate. We have a whole slew of new marketing material that is tailored to acute gouty arthritis flares and what are the messages that resonate. So a whole bunch of the architecture of our gout expansion really comes from the learnings from the 10 pilots.

Your second question on the development timelines for Harmony, and it's confidential to the collaboration and not one that I can speak to today.

And then the last one on monetizable IP. We absolutely keep working on IP that we can monetize, and collaborations that we can do from a development standpoint to create value for our shareholders, and Harmony is one step in that direction. And that's also part of the reason why, as Steve has highlighted, we now have these captured in a separate line under Cortrophin -- under Rare Disease and Brands.

Thank you. That concludes today's question-and-answer session. This concludes today's conference call. Thank you for participating. You may now disconnect.

Okay. Good afternoon, everyone. Thank you for joining us. For our next presentation, we're excited to have ANI Pharmaceuticals here with us. Representing the company to my right is Nikhil Lalwani, who's the President and Chief Executive Officer of the company; and to his right, Stephen Carey is the Chief Financial Officer of the company. For those of you who don't know me, I'll just quickly introduce myself. My name is Glen Santangelo. I'm the analyst at Barclays responsible for the specialty pharmaceuticals sector, among a few other things.

But again, we're very happy to have you here, Nikhil and Stephen. So thank you guys very much for taking the time out of your schedules.

Thank you, Glen, and thank you for having me.

Okay. Excellent. So why don't we just sort of dive right into it? I mean, 2025 was just a great year for the company. And I finally think that we can sort of reposition you no longer as a generics company that has rare disease assets. We're now going to call you a rare disease company that also happens to have a generics business as you cross that 50% threshold. So congratulations on that milestone.

Maybe a good place to start is if you just want to sort of level set everybody and talk about 2025 and the momentum you had sort of into the end of the year that set the stage for 2026 that will be a good place -- a good framework for us to dive in right after that.

Sure. Yes. Thank you, Glen, and thank you for acknowledging our transformation into a leading rare disease company. 2025 was important for the acceleration of that transformation into a leading rare disease company. As a company overall, we grew 4% on the top line and 47% on the EBITDA -- adjusted non-GAAP EBITDA line. The growth was fueled primarily by our rare disease business and within rare disease, Cortrophin, our lead asset, where we grew 75% to 76% to deliver $347 million (sic) [ $348 million ] in revenues in 2025. And then our generics business, which has played an important role in terms of providing EBITDA and cash flows also grew 28% to $384 million and gave us strong momentum going into 2026.

As we head into '26, we believe the acceleration of ANI into a rare disease company remains our top priority. We have 60% of our revenues coming from Rare Disease with Cortrophin growing to $540 million to $575 million from the $347 million we delivered in 2025. And the generics business with a significant outperformance in '25, staying flattish in 2026 to deliver an overall total company revenues of excess of $1 billion to $1.055 billion to $1.115 billion and the adjusted non-GAAP EBITDA line to $275 million to $290 million. Importantly, as we're driving growth, we're also balancing profitability. So we're growing 19% to 26% on the top line and 20% to 26% on the adjusted non-GAAP EBITDA.

Okay. Excellent. Well, thank you for all that background. I think it's sort of very helpful. And congrats on everything you achieved. I mean to see the 44% revenue and even have a little bit of margin leverage on top of that was incredible. Just looking at the stock, I mean, it's up a fair amount over the last sort of 12 to 14 months since the beginning of last year. I would have argued maybe even it should have been up a little bit more. But still, I mean, the market, I think, is slowly coming around. So it's great to see.

And maybe that's a -- let's start with Cortrophin Gel because I think that's clearly top of mind for everybody. And I'm trying to come back to that comment on the stock performance versus the revenue growth and the operating profit, growth that we saw. I think one of the concerns that we hear, which maybe is a good place to start is just talking about the durability of this product and the growth. And you laid out the guidance for 2026, which is helpful. So clearly, you're confident. But how would you sort of explain to people to sort of give them confidence that Cortrophin Gel has a long runway here and that 2025 was an aberration. What gives you sort of that confidence in the growth?

Thank you for that question. We believe very strongly in the robust multiyear growth potential for Cortrophin. And it really starts with the patients. We believe the addressable patient population is significantly underpenetrated. If I take one indication as an example, acute gouty arthritis flares, there are 9.9 million patients in the country with that indication. However, only 36% receive treatment per year. Of those, only 8% receive injectable treatments because their flares are so acute. So our addressable patient population is 285,000 patients. That's what we think is addressable. So a very small patient population amongst the much larger incidents.

And we're significantly underpenetrated, right? We're less than 10,000 patients for treating that indication versus a 285,000 potential addressable market. So the runway, and this is true in -- there's a slide in our deck that covers it across multiple sclerosis, rheumatoid arthritis, nephrotic syndrome, sarcoidosis, across multiple indications. And it's across the category between us and the competitor ACTH significantly underpenetrates the addressable market across indications. So that's really the key opportunity, the key driver of growth, right?

Now we are able to reach these patients. And that's proven by over 50% of our prescribers since we launched are prescribers that were naive to ACTH. They've never written an ACTH drug before. So we're able to reach these physicians and consequently reach this larger patient population by reaching these patients. When you think about the market, right, since we've launched the -- in the last market, the deceleration slowed first. And then last 2 years, it's grown 27% and 45%, respectively, with -- so really, for us, this is a question about market growth, significant addressable market and both it's beneficial to actually have 2 players out there that are trying to increase the share of voice. So this is an alternate treatment option for the appropriate patients in need.

On durability, a very important part is additional competition, right? What is the risk of additional competition? And look, the way we see it, this is a very -- this tough category to genericize. This is an animal-derived, porcine derived, and it's then taken through a complex manufacturing process. There's a very large number of peptides that are immersed in a gel to make an exact copy of this and show equivalents is very complex. There are companies that have tried in the past and not been successful because it's a tough drug to genericize. When you think about someone going -- starting from scratch and trying to develop a new drug application, you have to go one indication at a time, run multiple studies and get approvals one indication at a time. So we believe there's a long multiyear growth opportunity. And so there's growth and durability in this, in Cortrophin.

Maybe I just want to come back to one thing you just talked about is the ACTH market. You sort of talked about the deceleration earlier years ago. And when you launched this product, I think, in 2022, you sort of reaccelerated the growth. Talk about -- give us a little bit of history here in terms of the deceleration of that market, what the issues were in the past. And clearly, you've had a positive impact. But Talk about how big this market was prior to those Acthar Gel issues and the market decline? And what's your view on the TAM of the market today versus maybe what we would have thought 5 years ago?

Sure. So...

And I just asked because maybe that it's the lack of confidence given the history in this market that maybe makes people -- I don't want to say, use the word skeptical, but right, it certainly is on people's minds.

Sure. Yes. The market was -- so the ACTH market was $1.2 billion in 2017. And then it reduced over time to about $600 million in 2021. And we believe that the reduction in sales happened for a number of reasons that were exogenous external to the efficacy of the ACTH product and that involved a competitor having litigations, bankruptcy, other issues that didn't really have to do with does an ACTH product help appropriate patients. We've launched in January of 2022. And since we've launched, the -- as I said, that the market has reduced the degrowth and then really returned to growth. And if you look at where we are exiting '25, the market is basically back at the previous peak, right?

If you take the 4Q run rate or even the total year sales, we're essentially back at the previous peak. But we're just getting started because the addressable patient population is much, much larger, right? And if you think of where ANI's growth has come from, this has not come from share capture. A big portion of our growth has come from reaching new patients. 50% of our prescribers were naive to ACTH. It probably not even heard of the category before we launched. In addition, 15% of our volume comes from acute gouty arthritis players in an indication that was the competitor does not have and did not have in that previous peak. So we feel very confident of the ability to drive significant market growth by reaching the appropriate patients in need.

And can you talk about some of the differences between yourself and your key competitor in terms of -- and you talked about the indication is a little bit different, but if you could just sort of elaborate a little bit on the differences between the products.

Right. So both products are porcine-derived. However, there's a difference formulation and different composition of peptides that are in their product as well as our product. There's also a complex and different manufacturing process for the active ingredient as well as the -- for the API as well as for the finished dose formulation. So the products are different. They're from -- they're in the ACTH category, right? They have different indications.

So there's a number of overlapping indications that both products have, but they have infantile spasms that we don't, and we have a number of different indications. But from a commercialization perspective, acute gouty arthritis flares is the main indication that we've been commercializing that or focusing on for commercialization that they don't have.

All right. Stephen, maybe just a couple of quick financial questions before we leave Cortrophin. You talked about expanding the sales reps by 90 in the middle of the year, right? So that's going to add some incremental operating expenses and maybe drive some accelerated growth in the second half versus the first half. But also on the conference call, you sort of laid out a case that maybe some of the insurance verifications might be happening in January a little bit slower. And so that when we think about the first quarter, maybe it might be a little bit lighter relative to what we would normally expect.

So if you could just sort of walk people through the cadence of 2026 and how we should think about that 55% to 65% growth that you expect for the year, how that may play out from a cadence perspective?

Yes, sure, absolutely. And thanks for the question. I think of the Cortrophin revenue cadence really in 3 different layers, Glen. right? If you look at 2025, given the growth profile that Nikhil has been talking about, we had sequential growth throughout 2025. And the base of the 2026 forecast is for that continued acceleration, right? All of the resources we had behind the product leaving the 2025 year are still in a growth mode and driving further utilization of the product. And so the base layer is continued evolution of growth in the product. And with the always present for Rare Disease and for Cortrophin, a sequential step down Q1 versus Q4 of the prior year due to insurance reverifications. That's the base of the forecast.

The second layer of the forecast is the 90-person additional employees that we're putting behind the gouty arthritis flares indication. And that team is being recruited today and will be in the market detailing the product by midyear. And so a step-up in revenues in the third and fourth quarter as that team comes online and starts to become productive. And the evolution of that team will continue into 2027 as they become more efficient. Those are the 2 core principles behind the guide.

And then what we did on the year-end call, just to give external constituents further insight is we did talk about due to the increased volume of reverifications that need to occur, that we're seeing that taking a little bit longer in January. And so we see a shift of certain that volume, a slight shift of that out of January into later months. And so we talked about the first quarter being down.

Doesn't go away.

It doesn't go away. It just shifts back by a month or so. And therefore, right, we just gave a little bit more specificity to the first quarter.

Okay. All right. Can we shift gears and talk about your other rare disease asset, ILUVIEN? It's been about 18 months since you acquired the product. I'm just trying to back up in my mind. A lot has happened with this product. And so when you rewind -- could you just remind us the rationale for the deal, the changes you made to the label? And with a lot of those changes sort of now behind us, obviously, do you think there'll be greater focus on sort of driving that commercial success in fiscal '25, if I want to label '25 as that sort of transitional year for the product?

Sure. Yes. Thank you. The acquisition of Alimera was anchored in picking a therapeutic area or specialty that was synergistic with Cortrophin from a sales force perspective. So we picked ophthalmology as a key therapeutic area. And so we -- and then what we did is we expanded the sales force. We got about 31 reps from the Alimera acquisition. We added another 14 reps. And now we have about 45 reps that are out there promoting both Cortrophin and ILUVIEN to retina specialists as well as ophthalmologists. So that's the industrial logic behind the deal.

As you rightly pointed out that 2025 for the retina assets, ILUVIEN was a reset year. As we head into '26, we have momentum from a number of the commercial and strategic initiatives that we put in place. We have a strengthened commercial team. We had the successful deployment of initiatives from a marketing and sort of commercial initiatives to back the strengthened commercial team. We also have the release of the NEW DAY clinical study results. We're using that NEW DAY study results to -- we believe the results of that study will support the use of ILUVIEN earlier in the treatment of DME. So that's been a positive that will carry into 2026.

We had some challenges with funding support for Medicare patients that don't have adequate co-pay funding. While there is no -- none of that funding return baked into our guidance, what we have done and have had success with in '25 is getting some of the leading retina practices to use alternate approaches for patients that have the Part D benefit to use that benefit to get access to ILUVIEN.

And then an important part you mentioned, which is ILUVIEN is now indicated for both diabetic macular edema as well as chronic noninfectious uveitis in the posterior segment of the eye. So we merged the label of YUTIQ, which was the original product into ILUVIEN and now just have one product that is with more detailing. And that's made it simpler for the physician offices as they deal with only one product for both indications as well as in terms of maintaining inventory since this is a product that...

Commercially, is that playing out as you expected, hopefully?

It is playing out as we expected. And then obviously, within uveitis, steroids are the standard of care. And if you think of a lot of the innovation that's happening in the retina area, it's around reduced treatment burden and increasing the duration of care. And ILUVIEN meets both those criteria by being a long-acting intravitreal injection, which microdoses fluocinolone acetonide into the eye over a 3-year period.

Okay. Well, we got about 5 minutes left, and I got a lot to cover. So we're going to start doing a little rapid fire. So I'm going to shift gears and I'm going to shift to the generics business. You came off a great 2025. You said the business grew 28%, even the exit rate was very strong in the fourth quarter. But let's think about that year in the first half of the year, you had Prucalopride, right, on 180-day exclusivity that probably benefited that. And then you had the partner launch in the second half of 2025, which may also be contributing to the growth. Are we setting ourselves up for a very difficult comp in 2026? Like how should we think about that sort of growth year-over-year, just sort of given those events that benefited 2025?

Sure. So historically, our generics business, we've oriented to high single-digit, low double-digit type growth. But we've outperformed that expectation every year. We've essentially, if you look since '21, we've grown at a 25% CAGR. We obviously had a very strong 2025. The anchors or drivers of that strong growth are a superior R&D capabilities and execution, supported by strong operational execution and a U.S.-based manufacturing footprint. All of these trends will carry into 2026. We invest high single-digit percentage of our generic sales into R&D, and that allows us to launch 10 to 15 new products annually, which will support in '26, the performance in '26 -- and our orientation for this year is for the generics business to stay relatively flat to last year's significant overperformance of 28% growth.

Okay. Perfect. All right. Just moving on the established brands. It's only 4% of your revenue, so we're just going to spend 20 seconds here. You basically grew another 16% in the fourth quarter. Could you talk about the durability of the growth there? Is it even worth having a conversation? I mean, help us think how you've been able to sort of continue. And I know there were some items in there that explain that growth, but...

Yes. Look, I think that from a capital allocation perspective, Rare Disease is our priority one. Generics and the brands business creates a virtuous cycle of growth that allows us to take the EBITDA and cash flows from these businesses and it reinvested into driving the growth of our Rare Disease business. And so we'll continue to capture opportunities that we get with the brands business, but it's sort of -- we have to be disciplined for capital allocation and make sure that we support rare disease. We support the growth of generics with investment in generics R&D and then let brands just play a role in terms of generating EBITDA and cash flow for the Rare Disease business.

Steve, shifting gears to the gross margin. We got a big mix shift going on at the company, and it's not always easy for us to see the gross margin evolve the different components of your business. Maybe you can sort of help us think through that a little bit, how the gross margin should trend. And we know you have the royalty that's now stepped up in the highest tier with respect to Cortrophin. So help us think about that gross margin progression '25 through '27 just sort of given the mix shift that's sort of transpiring?

Yes, sure. So when we think about our 3 businesses, we talk about our highest gross margin business is the legacy brands business that Nikhil just spoke about. On the other end of the spectrum, the generics business. And in between is the Rare Disease business, largely due to the royalty to Merck. As we think about evolution going forward, first of all, '25 to '26 is influenced by those mix changes, but also a big influence is the nonrecurrence of that Prucalopride 180-day launch in the first half of the year. So that's a big year-over-year item. And as we think about things developing going forward, as rare disease sales continue to advance and become a bigger portion of the overall company revenues, that will be accretive to the gross margin line.

I know we're not way too early to talk about 2027. But as we get through these comp issues in 2026, we get through the sales force expansion, hopefully, we start to see that leverage drop in 2027 on the gross margin side and on the EBITDA side, right, as you annualize those operating expenses that you plan to incrementally add in 2026. Is that like a fair characterization?

Yes, that's a fair characterization. And as Nikhil said -- touch earlier, right, as we're driving the business for growth and the mid- to long-term success of the business, we're very thoughtful in terms of balancing out the profitability profile.

Okay. Can we talk about the balance sheet? The leverage is back down to 2x. Yes, that's solid free cash flow. What's the thought process around BD at this point, appreciating you clearly had a lot on your plate the last 18 months around the Alimera deal, certainly have no shortage of things going on. But how should we think about the BD strategy at this point given where the balance sheet sits?

Sure. So we want -- we have significant growth opportunities organically, both with rare disease as well as generics and long sustainable growth sorry, durable and high-growth opportunities organically. So we want to make sure that the deal that we do, deals that we do sort of add to that. The focus is on increasing scope and scale of our Rare Disease business. The near-term focus is on commercial assets, right, assets that do not have clinical risk associated with it.

And I think the 2 types of assets, right? The ones that are synergistic with Cortrophin on a call point perspective. But secondly, and we're increasingly looking at this is assets that leverage the rest of our infrastructure, right, which is patient support, specialty pharmacy distribution, hub services, medical affairs, market access, the rest of the rare disease infrastructure, it does not matter if they're in an indication or a specialty that is different from the ones that Cortrophin overlaps because it allows us to focus on Cortrophin and then overall, continue acceleration of our transformation into a leading rare disease company.

We're out of time, but I did have one more question that I wanted to sort of squeeze in. We sort of framed everything. You exit 2025 on solid footing. You gave 2026 guidance sort of well above expectations. Again, I look at the stock essentially flat sort of year-to-date, and we can discuss the different reasons for that. But you're here at a conference, you're meeting with investors.

And I guess what type of feedback are you getting? And is there anything you want to share with the investors here in terms of dislocations in terms of maybe the questions you're getting, what they think versus what you see as reality or your opinion? Like how do you sort of reconcile sort of that disconnect maybe with the recent performance of the stock, recognizing 2025 was a pretty decent year?

Sure. Thank you for that opportunity, Glen. We believe that the long-term growth and durability of our businesses is underappreciated in rare disease. And I think that that's the message that I would leave with investors.

Yes, that's what I was going to do. I was going to flip it to you for the last word. I mean, so in your mind, you think it's the lack of confidence in the durability of your rare disease assets and the growth outlook. I mean, I want to give you the last word with investors, anything you want to leave anyone with, anything you think people misunderstand and then we'll close it out.

Yes, it's not the lack of confidence. I think that it's just understanding that more. This is we have patents into the 2040s on Cortrophin. There is a large addressable patient population that we can help address the appropriate patients. So there's a multiyear growth opportunity with Cortrophin. In ILUVIEN, we have a large addressable market that we're addressing, so 10x of what anything patients that we're treating today. Both drugs are tough to genericize. So we have a very long runway. And so we have a long-term growing and durable rare disease portfolio. And we have a balance sheet that can support expansion of the scope and scale of our Rare Disease business.

Okay. Nikhil and Stephen, we'll leave it there. Thank you very much. Thank you for joining us.

Thanks so much, Glen.

Thank you very much.

Good day, everyone, and welcome to today's ANI Pharmaceuticals, Inc. Fourth Quarter and Full Year 2025 Earnings Results Call. Please note, this call is being recorded. [Operator Instructions] It is now my pleasure to turn the conference over to Courtney Moverly. Please go ahead.

Thank you, Erica. Welcome to ANI Pharmaceuticals' Fourth Quarter and Full Year 2025 Earnings Results Call. This is Courtney Moberly, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer; Stephen Carey, Senior Vice President and Chief Financial Officer; and Chris Mutz, Senior Vice President and Head of ANI's Rare Disease business.

You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com. This call is accompanied by a slide deck that can be accessed by going to the Events section of the Investors page of our website. You can turn to our forward-looking statements on Slide 2.

Before we begin, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act.

These forward-looking statements are based on information available to ANI's Pharmaceuticals management as of today and involve risks and uncertainties, and including those noted in our press release issued this morning and our filings with the SEC. Going such forward-looking statements are not guarantees of future performance.

Actual results may differ materially from those projected in the forward-looking statements. ANI specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law. During this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as an alternative to financial measures required by GAAP.

The non-GAAP financial measures referenced on this call are reconciled to the most directly comparable GAAP financial measures in a table available on the slide deck accompanying this call. The archived webcast will be available for 30 days on our website, anipharmaceuticals.com.

For the benefit of those who may be listening to the replay or archived webcast, this call was held and reported on February 27, 2026. Since then, ANI may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to Nikhil Lalwani.

Thank you, Courtney. Good morning, everyone, and thank you for joining us. 2025 was another year of outstanding execution and growth by the ANI team, highlighted by our remarkable results in the fourth quarter. At the core of everything we do is our purpose of serving patients improving lives.

With our progress in the last year, we are well positioned to continue delivering on that purpose in 2026 and beyond. Starting with Slide 4. In 2025, the company delivered record revenue adjusted non-GAAP EBITDA and adjusted non-GAAP diluted EPS, driven by strong performance across our rare disease and generics business unit.

For the full year, we grew total company revenues by 44% year-over-year and adjusted non-GAAP EBITDA by 47% year-over-year. In addition, we delivered exceptional growth for our lead rare disease asset, Cortrophin, with full year revenues up 76% year-over-year as we meaningfully expanded our reach in underpenetrated specialty indications and serve more patients. With our strong R&D and operational capabilities, our generics business continued to outperform, growing 28% year-over-year in 2025.

Turning to Slide 5. We believe the momentum we generated in 2025 positions us for continued growth in 2026. Our priorities for this year are threefold. First and foremost, ANI's transformation into a leading rare disease company. For our lead asset, Cortrophin Gel, we plan to maximize its multiyear growth opportunity by addressing the significant unmet need across indications.

We will continue to build on our momentum in the key underpenetrated specialty indications in nephrology, neurology, rheumatology, ophthalmology and pulmonology.

In addition, for building and deploying a 90-person organization dedicated to acute gardioarthritis fares. For this expansion, we plan to capture sizable and unique additional opportunity in gout to expanding awareness and adoption of Cortrophin for appropriate patients by newly identified physicians in polity and primary care.

For ILUVIEN we are focused on returning the product to growth by leveraging the commercial and patient access initiatives established in 2025. Importantly, we continue to believe in the long-term potential of ILUVIEN as we believe the addressable patient populations across DME and NI UPS are at least 10x the current number of patients treated with ILUVIEN today.

Our second priority is continued execution in our generics business by leveraging our superior R&D capabilities, operational execution, U.S.-based manufacturing and business development expertise as well as maintaining our current cadence of 10 to 15 launches annually.

We continue to make progress on this priority and anticipate another year of strong performance and cash generation from our generics business that will enable us to further invest in our rare disease business.

Our third priority is executing a disciplined capital allocation strategy. We are focused on driving organic growth by investing in our dedicated organization for Cortrophin in acute gartiarthritis flares and investing a high single-digit percentage of generics revenue into generics R&D and to drive inorganic growth by exploring opportunities to expand the scope and scale of our rare disease business. .

Turning to Slide 6. We believe the 3 2026 strategic priorities will drive long-term growth and value creation for the company. In 2026, we expect to deliver over $1 billion in revenue, representing 23% growth over 2025 at the midpoint of our guidance range.

Rare disease is expected to account for approximately 60% of our total revenues in 2026 with Cortrophin growing 60% year-over-year. We also expect to expand the bottom line with adjusted EBITDA forecasted to grow 23% year-over-year at the midpoint of our guidance range.

Later in the call, Steve will provide more detail on our 2026 guidance. In summary, 2025 was a pivotal year for ANI as we delivered record performance and drove significant growth across the business lines. We are entering the year from a position of strength and are focused on executing on our 3 strategic priorities.

We anticipate that our virtuous cycle of growth in which our generics and brands businesses generate meaningful cash flows to support our rare disease business will drive our transformation into a leading rare disease company.

I'll now turn the call to Chris to discuss our rare disease business in more detail. Chris?

Thank you, Nikhil, and good morning, everyone. Starting with Slide 7. Looking at 2025, I'm proud of our team as we closed out the year strong, delivering another excellent quarter, marked by significant growth for Cortrophin Gel as we expanded our reach in underpenetrated specialty indication. During the fourth quarter, the number of cases initiated and new patient starts reached another record high, and we saw broad growth across all of our targeted specialties, rheumatology, nephrology, neurology, pulmonology and ophthalmology.

Prescribing for Cortrophin gel and acute gouty arthritis flares remained a key growth driver this quarter. This indication is unique to Cortrophin gel among ACTH therapies and represented approximately 15% of total utilization. Notably, gardiaarthritis has also been a strong catalyst for new prescriber additions, including many providers who are previously unfamiliar with ACTH.

We also continue to realize meaningful revenue synergies and ophthalmology with fourth quarter Cortrophin gel volumes in ophthalmology over 2x that of the same period a year ago.

Ophthalmology remains a fast-growing targeted specialty for Cortrophin gel and we believe there is further upside as we expand awareness of Cortrophin gel for patients with severe allergic and inflammatory eye conditions.

Turning to Slide 8. Looking at the market more broadly, the ACTH space has returned to growth following the launch of Cortrophin Gel in 2022 and approached $1 billion in sales in 2025. We expect it to increase significantly in 2026 with Cortrophin gel growing by 55% to 65%. Turning to Slide 9. We continue to believe that the addressable patient populations across our key indications remain significantly underpenetrated.

For example, there are roughly 10 million patients in the U.S. with [indiscernible] about 36% received treatment annually, and they have 1.5 to 2 flares on average per year and about 8% of those patients with severe gadiarthritis and injectable treatment for their flares.

This group of 285,000 patients represent our addressable patient population. Importantly, prescribers who were previously naive to ACTH represent approximately half of our total Cortrophin gel prescriber base, and this cohort continues to expand.

We believe the most significant opportunity for growth is through overall expansion of the ACTH market by addressing unmet needs of appropriate patients. To capture the multiyear growth potential of Cortrophin gel, we continue to focus on 3 key strategic priorities outlined on Slide 10.

We are investing in high ROI commercial initiatives. Building on the commercial expansion we executed in 2025, we are now taking the next step to capture the unique opportunity for Cortrophin Gel and acute [indiscernible] flares with our new 90-person dedicated organization. There are several reasons why we are confident about the opportunity in acute gadiarthritis flares.

As I highlighted earlier, there is a large addressable patient population of 285,000 patients. Second, Cortrophin gel is the only approved ACTH therapy for acute cardio arthritis flares. And third, we have a proven track record in this indication. Prescribing for acute gadioarthritis laris represented approximately 15% of Cortrophin gel use in 2025.

In addition, we ran successful pilots across 10 territories in primary care and podiatry. This gave us further confidence to expand our organization to capture the opportunity in acute [indiscernible] The hiring process is underway, and we expect to deploy this team by midyear. While we anticipate the expansion to the impact in Cortrophin gel volumes in the second half was 2026, we expect a greater impact in 2027 as the team reaches full productivity. Additionally, we continue to focus on enhancing patient convenience.

Our Cortrophin gel prefilled syringe offering, which we launched in April of last year, simplifies administration and provides a more convenient option for patients.

The launch of the prefilled syringe has been well received by both patients and prescribers and continue to support broader adoption and serve as an important growth driver for Cortrophin Gel. Finally, we continue to invest in generating robust clinical evidence to support physician decision-making and confidence in Cortrophin Gel.

As part of this effort, we are advancing a 150-patient Phase IV study in acute [indiscernible] flares. This trial, along with ongoing collection of preclinical and real-world data across core indications is designed to reinforce Cortrophin Gel differentiated nonsteroidal mechanism of action and provide insights that may support adoption and treatment guidelines.

We also continue to generate robust preclinical data for our key stakeholders on Cortrophin Gel differentiated mechanism of action across multiple disease states. This remains a critical growth initiative. As expanding the body of evidence supporting Cortrophin gel use across indications help physicians make more informed treatment decisions.

On Slide 11, turning to our retina franchise. We are continuing to advance several initiatives to support ILUVIEN sales. Our fully onboarded commercial team is focused on educating and engaging the retina community, and we are ramping up peer-to-peer educational programs and field activities with updated marketing materials to enhance physician understanding of ILUVIEN and its 2 indications.

In June of last year, we began promoting ILUVIEN under the combined label for chronic NI UPS and DME. Our sales teams have been educating customers nationwide, while our market access team worked with payers to establish coverage for the new chronic NIPS indication, all 7 Medicare Administrative Contractors or MAX have now updated their policies to cover ILUVIEN for NI UPS.

Among the top 20 commercial payers, all those with ILUVIEN specific policies have updated them to reflect both DME and NI UPS indications. We also implemented initiatives to help physician practices navigate ongoing Medicare market access challenges that have persisted since January 2025.

As a reminder, patient support foundations, such as good days had limited funding in 2025, affecting their ability to assist Medicare patients with co-pay support across retina products. Our team has gained traction with leading retina practices, helping them explore pathways secure ILUVIEN for eligible patients under the Medicare Part D benefit using a specialty pharmacy, the same approach used for Cortrophin gel access. In addition, we continue to share results from our NewDay study of ILUVIEN in patients with DME and which were presented at prominent medical meetings, including most recently at the Flow Retina International Congress in December and the Hawaiian and Retina Conference in January.

With that, I'll turn the call over to Steve for the financial update. Steve?

Thanks, Chris, and good morning to everyone on the call. I'll review our fourth quarter and full year 2025 results and 2026 guidance in more detail. In 2025, we delivered on our financial commitments, generating robust top and bottom line growth and significant cash flows.

Starting on Slide 12. The ANI recorded revenues of $247.1 million in the fourth quarter, up 30% over the prior year period. For the full year 2025 ANI generated record revenues of $883.4 million, up 44% versus 2024. Revenues from Cortrophin Gel in the fourth quarter were a record $111.4 million, up 88% from the prior year period.

In 2025, Cortrophin gel delivered $347.8 million of net revenue, up 76% year-over-year driven by strong adoption across neurology, nephrology, rheumatology, pulmonology and ophthalmology. ILUVIEN net revenues were $19.8 million in the fourth quarter and $74.9 million for the full year 2025.

Revenues for generics in the fourth quarter were $100.8 million, an increase of 28% over the prior year. The outperformance for the quarter was driven by continued strength in the partner generic launch that occurred in the third quarter of 2025. Full year revenues in 2025 for generics were $384.1 million, an increase of 28% over the prior year, reflecting our strong R&D capabilities, execution and steady cadence of new product launches.

Now moving down the P&L on Slide 13. As a reminder, when I speak to our operating expenses, I will be referring to our non-GAAP expenses which are detailed in Table 3 in our press release. Generally, our non-GAAP operating expenses exclude depreciation and amortization, stock-based compensation and certain costs related to litigation and M&A activity. Please refer to Table 3 for a full reconciliation to our GAAP expenditures. Non-GAAP cost of sales increased 43% to $99.8 million in the fourth quarter of 2025 compared to the prior year period primarily due to net growth in sales volumes and significant growth of royalty-bearing products.

Non-GAAP gross margin in the fourth quarter was 59.6% and a decrease of approximately 400 basis points from the prior year period, principally due to product mix, including significant growth of royalty-bearing products, including Cortrophin and a partner generic product that was launched in the third quarter as well as lower brand revenues.

For the full year of 2025, non-GAAP cost of sales increased 44% to $339.5 million compared to the year before and non-GAAP gross margin was 61.6%, down approximately 10 basis points from the prior year.

Non-GAAP research and development expenses were $11.7 million in the fourth quarter, a decrease of 27% from the prior year period, driven by timing of rare disease and generic programs. For the full year of 2025, non-GAAP research and development expenses increased 18% to $49.5 million compared to the year before due to higher investment to support future growth of our rare disease and generics businesses.

Non-GAAP selling, general and administrative expenses increased 28% and to $70.2 million in the fourth quarter, driven by spend for our new larger ophthalmology sales team, promoting Cortrophin Gel and ILUVIEN and continued investment in rare disease sales and marketing activities including the expansion of the rare disease team in the first quarter of 2025. For the full year of 2025, non-GAAP selling, general and administrative expenses increased 46% to $264.6 million.

Adjusted non-GAAP diluted earnings per share was $2.33 for the fourth quarter compared to $1.63 per share in the prior year period. For the full year of 2025, non-GAAP diluted earnings per share was $7.89 compared to $5.20 the year before. Adjusted non-GAAP EBITDA for the fourth quarter was $65.4 million, up 31% compared to the prior year period and was $229.8 million for the full year, up 47% compared to the prior year.

We ended the fourth quarter with $285.6 million in unrestricted cash up $140.7 million as compared to the $144.9 million as of December 31 of the prior year. Cash flow from operations was $30.4 million in the fourth quarter of this year and $185.2 million on a full year basis.

As of December 31, 2025, we had $629.1 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the fourth quarter, our gross leverage was 2.7x and our net leverage was 1.5x our full year adjusted non-GAAP EBITDA of $229.8 million. This morning, we are pleased to reaffirm our 2026 financial guidance, which reflects significant top and bottom line growth.

Our guidance outlined on Slide 14 is as follows: 2 sorry, 2026 net revenue of $1.055 billion to $1.115 billion representing year-over-year growth of approximately 19% to 26%. Cortrophin Gel net revenue of $540 million to $575 million representing year-over-year growth of 55% to 65%, driven by continued volume gains.

Consistent with prior years and typical industry dynamics, we expect first quarter Cortrophin general revenues to be down sequentially from the fourth quarter and to represent approximately 13% to 14% of total 2026 revenues slightly lower than in 2025, when the first quarter accounted for approximately 15% of full year revenues.

This effect is driven by 2 factors: first, we are experiencing typical seasonality related to the impact of insurance reverifications, which appear to be taking slightly longer as compared to the prior year. Due to increased Cortrophin patient volume in the physician's offices and in some parts of the country due to weather-related physician office closures that temporarily delayed the reverification process.

While these factors impacted January, we have since seen a 25% jump in volumes dispensed and acceleration in new patient starts in February, and are confident that the momentum will persist in March as physician offices complete work through the reverifications backlog.

Second, our full year Cortrophin guidance is inclusive of initial script volume expected to result from our 90% organizational expansion to support our gaudy authorities flares indication. Revenues associated with this expansion will first occur in the third quarter and are expected to build momentum throughout the fourth quarter.

As we look further out into the year, we remain confident in our full year guidance and the significant multiyear growth opportunity for Cortrophin Gel. We expect very significant sequential growth in the second quarter as typical first quarter dynamic subside. We then expect further sequential gains in the third and fourth quarters, driven by continued performance of our portfolio, pulmonology and ophthalmology teams, in addition to the full deployment by the end of the second quarter, of our new 90-person organization focused on acute cadiarthritis flares.

We expect ILUVIEN net revenue of $78 million to $83 million, representing year-over-year growth of approximately 4% to 11%. We expect adjusted non-GAAP EBITDA and of $275 million to $290 million, representing year-over-year growth of approximately 20% to 26%.

And from a quarterly cadence perspective, we expect adjusted non-GAAP EBITDA to be down sequentially in the first quarter and modestly down as compared to the first quarter of prior year driven by quarterly revenue dynamics.

We then expect sequential growth in the remaining quarters of the year, with the fourth quarter representing the highest quarter by a significant amount driven by incremental contribution from our gout focused team expansion. We expect adjusted non-GAAP earnings per share between $8.83 and $9.34, representing year-over-year growth of approximately 12% to 18%.

We expect adjusted gross margin to be 59.3% to 60.3% in 2026, which is down from 2025, driven by significantly higher forecast sales of royalty-bearing products the non recurrence of revenues from our first half 2025, 180-day exclusive launch of [indiscernible] and the expectation of lower brand sales.

We currently anticipate a full year U.S. GAAP effective tax rate of approximately 26% to 28%. And consistent with prior quarters, we will tax affect our non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share, utilizing our estimated statutory rate of 26%.

We anticipate between $21.5 million and 21.8 million shares outstanding for the purpose of calculating full year non-GAAP diluted EPS and finally, please note that we will continue to exclude from our adjusted non-GAAP diluted EPS calculation, the dilutive shares included in GAAP diluted EPS, which are expected to be offset in full by the cap call transaction.

With that, I'll turn the call back to Nikhil.

Thank you, Steve. Turning to Slide 15. In closing, we delivered a remarkable 2025 characterized by significant growth across Cortrophin Gel and outperformance in our generics business. We've entered 2026 in a position of strength and remain focused on achieving our strategic priorities, including accelerating our transformation into rare disease, continuing to execute in generics and deploying capital in a disciplined manner. .

Overall, we expect to deliver over $1 billion in revenue in 2026 with rare disease representing approximately 60% of total revenues. With that, operator, please open the line for questions.

[Operator Instructions] And we'll take our first question from the line of Glen Santangelo from Barclays.

Nikhil, obviously, Cortrophin continues to surprise on the upside, and you sort of make the case that you believe there's a multiyear opportunity here as you expand into these under-penetrated indications. And you're obviously investing in the sales force to try to take advantage of that.

Without giving us guidance beyond 2026, I don't know if there's any high-level commentary you can sort of give us -- can you help us think about how meaningful this multiyear opportunity could be.

And I am guessing you're starting to think about a peak sales number, maybe it's a little bit premature, but how do you think about that? And then my follow-up to Stephen's going to be -- the royalty steps up this year. Can you help us think about how that royalty is going to step up so we can sort of better model gross margins going forward?

Yes. Thank you for your question, Glen. Look, I think we believe in the significant multiyear growth opportunity for Cortrophin but I think the key really is Slide 9 in our deck from this morning, where we highlight the addressable patient populations across indications. .

And these are significantly underpenetrated, not just by us but across the ACTH category. So we believe that there is a much larger number of patients that are yet to -- that are appropriate for ACT therapy that are yet to benefit from this therapy. So we see a significant multiyear growth run rate for the category and also for Cortrophin.

And we're investing to build momentum in 2016 and beyond, right? So high ROI commercial initiatives like the 90% organizational expansion for gout, but we did an expansion last year. We're enhancing convenience, we launched a prefilled syringe last year.

We're continuing to evaluate opportunities to further enhance patient convenience. And importantly, we're generating both scientific and clinical evidence we advanced Phase I clinical trial. We're advancing a Phase I clinical trial for Cortrophin in gout as well as a robust pipeline of investigator-initiated trials across disease trades.

So we believe in the strong multiyear growth opportunity and are investing to ensure that we can capture that opportunity? And again, we believe in the opportunity for the category as a whole to keep growing for several years. And then your second question on the Merck royalty in 2025, annual revenues of Cortrophin Gel reached a level by which we surpassed the highest royalty tier for incremental net sales, the way in 2025 itself, we were in the highest royalty tier for the royalty.

And then we currently anticipate the blended royalty rate to be in the high 20s in 2026.

And we'll take our next question from David Amsellem with Piper Sandler.

So I had 2 on Cortrophin. So one, I'm trying to get a better sense of how you're thinking about operating leverage going forward. So you're adding the 90 reps, you're calling on primary care, you're calling on podiatrist. I'm just wondering how promotion intensive you perceive the gout indication to be and what that means for potentially further expansion.

So just help us understand that and how you're thinking about operating leverage. That's number one. And then number two, are you thinking about indications like sarcoidosis and ophthalmic indications -- can you talk about the number of vials used or duration of treatment in those kind of indications versus gout?

And what I'm trying to get at is the value of a given patient across the different opportunities within the Cortrophin franchise. So if you could help us provide color there, that would also be helpful.

Great. Thank you for your question, Dave. So the first question on operating leverage. Look, we're still in high-growth mode, and we continue to balance growth and profitability as we drive that growth, right?

So when you look at 2025, our guidance implies EBITDA growth of 20% to 26%, and the EBITDA margin as a percentage of growth -- sorry, as a percentage has stayed in the same in our 2026 versus 2025 despite a our very significant investment in this 90% organization for a graft and then also related OpEx, right?

So the total implied OpEx increase at the midpoint of our guidance is about $50 million, majority of which is for the gal expansion. And despite that, we're keeping the EBITDA margin percentage the same in '26 versus '25.

We strongly believe that as we had seen even with the expansion last year of the sales force that we will see partial impact from the organization expansion for gout in 2026, and we'll see full impact in 2027, right? So the full year impact and -- because it takes the sales force, we'll have them in place by mid-year they'll have impact in Q3 and Q4. And then you'll see full impact in 2027, obviously driving operating leverage.

So that's the question on operating leverage. And look, I think the key is in terms of further expansions, the key is the addressable patient population, right? As you know, we currently have a combined team that details into nephrology, neurology and rheumatology. That's called our portfolio team. We expanded that team in 2025, right?

We still have a much larger addressable patient population that we can address, not just in these 3 beauty areas but across areas. So with an ability to reach physicians and reach patients there would be benefit from further expansions. Obviously, but that's down the field as we capture this multiple multiyear growth opportunity.

I mean the key in terms of the current year investment we're seeing impact on this year retaining the EBITDA margin percentage and then going in 2027, we'll see a much bigger impact with the same level of SG&A this year.

Your second question was on the duration of treatment across indications. The duration of treatment does indeed vary sarcoidosis has a much longer in use and more miles per patient, whereas acute [indiscernible] flares has a lower number of vials per patient that is appropriate, right, at the time of the exacerbation or flare. So there is a variance across the nation that we serve with Cortrophin Gel. Thank you, David.

And we'll go next to Vamil Divan from Guggenheim Securities.

Great. Maybe one more on Cortrophin. I could sort of building on the earlier question. So this additional 90% organization using is dedicated to the county opportunity in targeting primary campaign. I'm just trying to get a sense of again sort of the leverage of the opportunity for them to do other things beyond just gouty arthritis will they be going to any other specialties?

Or are there other indications they'll be focusing on? Or is it strictly just for a arthritis. Just trying to get something in the ability to leverage that additional investment. And then second question, I guess, more for Steve on the business development side.

And you've talked about investing and kind of expanding the rarer disease opportunity here. I'm just trying to get a sense of given where your leverage is now. So what you're willing to do in terms of leverage versus using equity or as you think about the size of potential deals what you beat in terms of options for financing those sorts of opportunities.

Thank you, Vamil. So on the 90% organization, that's for gout. And as a clarification, not all 90 are in sales. So majority of that any person grew its sales expansion, but there are obviously patient support operations and marketing and other support areas, too. .

But yes, that organization and the sales organization and the rest of the organization can be leveraged both for other indications that they treat or primary care and purity do treat other indications that Cortrophin is indicated for, our focus is primarily on gout, but there are other indications potentially that they can treat, which [indiscernible] for the appropriate patients. but can be leveraged for that.

But in addition, that sales force can also be leveraged by adding another product in the basket just like we did for ophthalmology. So that option is available. Obviously, our -- the opportunity in acute garden arthritis flares is very significant. We've identified 7,000 HCPs, that treat the most severe acute cardio arthritis flares patients, and that is our -- that is the primary focus of this expansion, and that is what we will be -- we focused on as we put this team in place by midyear.

And look, we've made very good progress on the recruitment. We have our sales leadership and the area business directors in place and we're now moving to recruitment of the sales team members, and we will launch by midyear. So on the acute a few [indiscernible] players expansion. And then I'll turn it to Steve to answer your question on BD. Steve?

Yes, thanks for the question. We're incredibly pleased with the cash flow dynamics of the company in 2025. We're ending the year with $285 million on the balance sheet and the business generated $185 million from operations in 2025. And as you see in our full year guidance, right, we're projecting continued both revenue and profitability measures growth and so we expect very healthy cash flows in 2026 as well. .

And so at this point in time, right, given the strategic imperatives of the company to expand rare disease we anticipate accruing that cash to the balance sheet to build that war chest for future business development and M&A activities. I think what you've seen us do consistently, you can look back to when we purchase Novidium in 2021, when we purchased Alimera in 2024, right?

We take a balanced approach to how we finance these types of activities. And in terms of leverage ratio, right, we like to take a reasonably conservative approach there. I think what we've done in the past is we'll take leverage up to the 3-ish range, maybe a touch above 3% on net leverage but always with a clear line of sight in terms of organic delevering.

And if you look back, right, to the close of Alimera, we were just right around 3x net levered and here, just 5 quarters downstream, we've cut that leverage in half really driving with organic growth in the business. So I think you should expect similar moves in the future. Okay.

And we'll take our next question from Dennis Ding with Jefferies.

We have 2. So on Cortrophin, thanks for the color on Q1, it seems like the winter storms were an unexpected impact, but bad things are recovering.

So I'm wondering when you take a step back and think about the first versus second half split, it seems like it will be meaningfully second half weighted, and that does put pressure on the gout expansion going as planned. So how do you give investors confidence that will go as planned and the PCPs will be okay with prescribing a very expensive product.

And then question number 2 is specifically on gross margins. So the royalty to work, I believe, is capped around 30% so we shouldn't really get any more incremental headwinds moving forward. But how are you thinking about buying that royalty down given how much cash flows you guys are generating? And is that a priority for you? And how do you also convince Merck to come to the table?

On thank you for your questions. Dennis, look are new dedicated field force for acute [indiscernible] arthritis flares will be deployed by midyear. And are reasons to believe are, number one, the large underpenetrated market opportunity and Cortrophin is the only approved ACTH product with this indication? Second is we have a successful track record in got plus of our volumes in 2025, coming from gout in rheumatology and nephrology. .

And number three, our successful pilot programs across 10-plus territories in primary care and parity offices, which we ran in 2025, right? Would see the most severe acute [indiscernible] arthritis flares patients.

And so we saw success with those pilot programs, and that gave us the confidence to deploy this larger sales force and the large organization in an indication where we have the indication, and we are the only ACTH product available, right? So with the field force deploying the midyear, we expect to see in Q3 and Q4, like we saw in 2025 when we did the expansion for our portfolio sales force. And we'll see the full realization in 2027, right?

As we're expanding our field force, we're also investing in clinical evidence generation through a Phase IV trial to expand usage over time. That's on the gout expansion. And then your second question on the Merck royalty, look, I think we've -- in we are always evaluating potential opportunities, but we do not comment on active or nonactive business development initiatives, especially with our partners. And thank you for your question, Dennis.

And we'll move next to Ekaterina Knyazkova.

Just 1 from me. So just on Cortrophin gel, have you seen any recent changes on the patient access front, just are you seeing any payers or plans getting more triple or coverage or reimbursement? Or are you seeing kind of trends that are similar as you were seeing last year?

And thank you for your question, Ekaterina. Look, we try to find a balance between sharing information that is helpful to investors and that is competitively sensitive. .

Having said that, at an overall level, we have not seen material changes from an access perspective. again, we're targeting or we're reaching -- trying to reach the appropriate patients as a late-line therapy with Cortrophin gel but thank you for your question.

And we'll go next to Thomas Smith with Leerink Partners.

Two on Cortrophin, if I could. You mentioned about 15% of utilization came from acute gave arthritis in 25. Could you just give us a sense of what your expectations are for where that number goes in '26 and '27 given the sales force expansion efforts? .

And then could you give a little bit more color on the Cortrophin pilot programs executed in primary care and pathology. Any details I guess, on specific feedback from those prescribers versus your other specialty types and any specific learnings you're implementing to help better target those offices.

Yes. Good morning, and welcome to your first ANI conference call. Tom, great to have you. So the first question is on our current business. in gout, about 15% of our volume comes from gout. As we deploy this targeted sales force and broader organization, we do expect it to increase significantly.

We're not putting a number to it at this time, but we'll keep you updated, obviously, on our progress. I think the important thing to highlight here is that if you look at the ANI Cortrophin story, a big part of that success has been being able to reach new physicians.

Almost half of our physicians that have prescribed Cortrophin were naive to the category, [indiscernible] prior to the entry of Cortrophin gel. And if you think about -- and this dovetails into your second question around the pilot programs. If you think about the HCPs that we're reaching through this expansion, we're targeting -- we're trying to reach about 7,000 ETPs that we've identified across territories, right? Majority of these right?

Obviously, some were part of the pilot programs that we had across 10 territories, but most of these have not been. And so that will further expand, right? And the success we've had in being able to reach new physicians right will continue. It has given us that for them, and we'll continue as we reach these new primary care and podiatry care physicians, right? So what will also expand is not just the gout volumes as a percentage of Cortrophin volumes, but also the number of physicians and a number of new physicians that were naive to ACTH.

And then going back to your second question regarding -- or I guess, second part of your second question on the pilot programs. I think that we've had a lot of learnings in terms of the discussion to be had with the primary care and proprietary physicians in terms of identifying the appropriate patients, how to work with their offices right to work through the enrollment of fulfillment process?

And then also, learnings on primary care and podiatrist are very large sort of number of HCPs that are there in the country but really figuring out the 7,000 that treat the most severe acute guard arthritis flares, how do you identify them with the claims and other data that is available so that you're reaching the appropriate patients?

That's been part of our learnings through the pilot programs through 2025. And thank you for your question, Tom. .

And we'll take our next question from Les Sulewski from Truist Securities.

Congrats on the progress. Three for me, Cortrophin first, you noted that 15% of utilization is coming from gout. How would you expect that trend to uptick once the new team is in place? And is this a good representation of the percentage of the total consultant revenues? And then will you have some of the results from Phase IV trial in time for the sales force expansion?

And the second, on ILUVIEN, can you provide an update on the specialty pharmacy progress and perhaps just kind of your thoughts on the patient access? And then lastly, on generics, how are you thinking about product cadence and erosion as we move through the year.

For questions. I'll take them one by one. So the first question on the gout -- we do believe that the 15% of volume of current volumes will expand, right, as a percentage of total volumes with this investment. So we will see a significant uptake we will update you as we move along.

On the trial, we are -- the trial -- the Phase I trial is progressing, and we will provide meaningful updates as that trial progresses. If the organization expansion, right? We've already hired, as I said, the sales leadership and the ABD, they're your business directors. The organization will launch in full by midyear. The results of the trial will not be in place by then. So that's on the come later on, and we'll obviously provide updates on the trial.

The second question was on ILUVIEN. So on ILUVIEN, we continue to make progress in the growing use of the alternative access channels to navigate the market access challenges for Medicare patients. We are seeing prominent practices adopting this alternate workflow and use of alternate channels.

And it's basically patients that have access to the drug benefit. And that's the same procedure that or process that we use and workflow that we use for Cortrophin. And so we've seen prominent retina practices use it.

Now what we -- what has happened with the foundation funding is we had seen some early contributions to the funding earlier this year. And though this hasn't had a meaningful impact on patient access to ILUVIEN it was open for a few days and then it was closed back. So our guidance for 2026 does not assume that the funding will return in any meaningful way. and we will continue to closely monitor the situation and of course, stay focused on growing the use of the alternative access channels to navigate the market access challenges in addition to the strategic investments in marketing and medical affairs to support the increased awareness of the new day clinical data for DME, establishing the coverage for both DME and NI UPS and then obviously the strength in the commercial team and further enhanced promotional efforts.

So that's on ILUVIEN. And then finally, your question on the genetics cadence. We are continuing to have a strong cadence from our -- driven by our R&D capabilities of 10 to 15 launches.

That will help support growth of the generics business and cash flow generation that we are reinvesting into rare disease to accelerate the transformation of ANI into a leading rare disease company.

And thank you for your questions, Les.

And we'll take our next question from Brandon Folkes with H.C. Wainright.

Congrats on the progress. Maybe just sort of following on from the line of question on Cortrophin. Outside of gout, is it any way you can just give us some color in terms of how you're seeing the ACTH market shape up? Are prescribers choosing one product over the other or prescribers using both where they can. You talked about adding new prescribers. Can you just help us think through when you convert these new prescribers, are you generally converting them to sort of be a Cortrophin prescriber or a ACTH believer in prescriber?

And what I'm trying to get to is how competitive is the next script for a potential patient right now versus a continued market expansion. How long do you see sort of the market expansion playing out versus market expansion as well as share capture between the 2 and within the category driving growth.

Yes, thank you for your question, Brandon. So I think your first question was on the ACTH market beyond and I think that we'll just point to a couple of points. Number one is that we see growth across indications across the core indications that we launched with, which is in rheumatology, nephrology and neurology in addition to in the pub and ophthalmology. .

If you think about the ANI's growth in Cortrophin in 2025 in Cortrophin, a significant portion of that came from just growth across all these specialties outside of gout. Now gout also was a driver but there was significant growth across these other specialties too.

And then really, the thing that's underpinning and that really goes to your second question around the competitive situation. And this is, to us, not about share capture at all. This is about market expansion, reaching the appropriate patients and the addressable patient population is very significant. And highly underpenetrated, right?

So it's significantly underpenetrated across indications. And so the fact that 2 players are out there trying to address the appropriate patients ultimately supports the overall market growth and ensures that the appropriate patients get the benefit of ACTH treatment for their indications.

And then maybe the last part of your question, which was -- we are -- our team is out there trying to convince and this is a little bit on a lighter note. But our team is out there trying to convince patients -- I'm sorry, current confused physicians of the appropriate patients for Cortrophin, right, and not the broader ACTH category. So thank you for your questions, Brandon.

And I would like to now turn the call back over to Nikhil Lalwani for closing remarks.

Thank you, everybody, for taking time to join the ANI discussion. We look forward to updating you on our progress and are looking forward to a strong 2026. Thank you so much, and we will remain focused on our purpose of serving patients, improving lives.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Hello, everybody. I'm Ekaterina Knyazkova from JPMorgan and pleased to be introducing ANI Pharmaceuticals. And from the company, we have Nikhil Lalwani, CEO; and Steve Carey, CFO, who will be doing a presentation, and then we will jump into Q&A. And with that, I will turn it over to Nikhil.

Good afternoon, and thank you for joining us here for a session on ANI Pharmaceuticals. These are our standard disclaimers regarding forward-looking statements, kind of the financial information that we're presenting. So I'm proud to tell you here about ANI Pharmaceuticals, a profitable, high-growth biopharmaceutical organization. that we're transforming into a leading rare disease company. As we go through the presentation, I'll tell you about how we're accelerating this transformation into a leading rare disease company.

In '26 we're projecting over $1 billion of revenue, which represents 26% growth year-on-year versus '25, a year will be delivered greater than 39% year-over-year growth. The rare disease business is our primary focus and will account for approximately 60% of total revenues. With our lead asset, purified Cortrophin Gel providing substantial durable multiyear growth opportunities. Our generics business delivered strong cash flows driven by superior R&D capabilities, operational execution and U.S. manufacturing. And what you see on the right-hand side is this creates a virtuous cycle of growth where our EBITDA and cash flows from generics and brands allows us to invest in rare disease and expanding the scope and scale of our rare disease business and are accelerating the transformation into becoming a leading rare disease company. We have a proven track record of delivering top and bottom line growth. Since 2022, we've more than tripled our revenues and more than quadrupled our adjusted non-GAAP EBITDA.

To speak a little bit about our 2025 accomplishments where we had robust expansion across the business. Our net revenues grew by more than 39% to $854 million to $873 million in revenues and our adjusted non-GAAP EBITDA grew more than 42% to $221 million to $228 million. This was driven primarily by the rare disease business, which generated greater than 84% year-over-year top line growth in our generics business, which outperformed with greater than 20% year-over-year top line growth.

As we begin 2026, our priorities to drive long-term growth and value creation are threefold: number one, to accelerate ANI's transformation into a leading rare disease company. Cortrophin Gel, our lead asset, for that asset, we will maximize the multiyear growth opportunity by addressing significant unmet need across indications. We'll build on the momentum in the underpenetrated specialty indications of nephrology, neurology, rheumatology and pulmonology. And in addition to that, we're building and deploying this year a 90-person organization dedicated to acute gouty arthritis flares by the middle of the year.

We're also advancing a Phase IV trial to establish further evidence supporting the use of Cortrophin Gel in acute gouty arthritis flares. And we will continue to evaluate opportunities to enhance patient convenience. For our second rare disease asset, ILUVIEN in '26, where we will return ILUVIEN to growth by leveraging the commercial and patient access initiatives that we began in 2025.

Priority number two, continued execution in our generics business, leveraging our superior R&D execution, our operational excellence and our U.S.-based manufacturing footprint and business development expertise to continue expanding cash generation and delivering or maintaining a current cadence of 10 to 15 launches annually.

Coming to our capital allocation, which is our third priority. We will continue to be disciplined in our capital allocation. From a balance sheet perspective, we will explore opportunities to expand the scope and scale of our rare disease business. And from a P&L or OpEx perspective, we will invest in the dedicated organization for Cortrophin Gel in gout, and we will invest high single-digit percentage of generics revenues to support the growth in generics.

When you look at our '26 guidance, it reflects strong top line and bottom line growth. Our net revenue guidance is $1.055 billion to $1.115 billion, representing 24% to 28% growth, and our adjusted non-GAAP EBITDA guidance is $275 million to $290 million, which represents 24% to 27% growth. Importantly, Cortrophin Gel net revenues of $540 million to $575 million represents 55% to 65% growth. And this is in year 5 of our launch, right? And after delivering 76% growth between '24 to '25.

To tell you a little bit more about our rare disease business. The rare disease business is the primary driver of growth. It's expanded from 0% of our sales in '21 to almost 60% of our sales in our '26 guidance. Even between -- you see the strong growth from '24 to '25, but even from '25 to '26, we're estimating a 51% growth across both Cortrophin and ILUVIEN.

Cortrophin Gel is our lead rare disease asset. It's a purified corticotropin, a late-line treatment option for patients that are struggling with certain chronic autoimmune disorders. Cortrophin is approved for multiple indications in neurology, nephrology, rheumatology, ophthalmology and pulmonology. With a strong potential for multiyear growth as the key indications are significantly underpenetrated and therefore, have significant unmet need. The ACTH market is a fast-growing market with 2 players, and it grew 45% year-over-year in '25 to about $992 million.

We have long-term sustainability in Cortrophin driven by significant barriers to genericization, both regulatory and IP. And lastly, we have multiple presentations for patient convenience. We have vials as well as a prefilled syringe.

To take a step back, the ACTH market returned to growth following the launch of Cortrophin in '21. And as you -- sorry, in '22 and what you'll see is that the -- it has been accelerating since we -- over the past 2 years. We had 27% growth in '24, and you're seeing 45% growth in '25. We believe in the strong future multiyear growth potential. And because across indications, they are significantly underpenetrated and we have a proven ability to reach new HCPs and patients. Over 50% of our clinicians that have prescribed Cortrophin were naive to ACTH and had never prescribed an ACTH drug before.

So to dimensionalize the under penetration across indications, and what this shows, this shows across 5 different therapeutic areas. But I'll start with the 4 on the right. Those are our foundational therapeutic areas, multiple sclerosis, RA, sarcoidosis and nephrotic syndrome. And you see that the number of patients that we believe are in our addressable market are significantly larger than anything that we're treating -- than the number of patients we're treating today. And then I'll double-click on acute gouty arthritis flares and walk you through how we arrived at the -- as an example, at the addressable patient population.

So there are roughly 10 million patients in the U.S. with gout, about 36% receive treatment annually, and they have 1.5 to 2 flares on average per year, but only 8% of those patients receive an injectable flare treatment. And that's the group that we consider with severe acute gouty arthritis flares as our addressable patient population. And that's 285,000 patients. As I said before, a very small portion of that is being penetrated today and creates a significant opportunity, multiyear growth opportunity for ANI.

So what are we doing? I said the word strong multiyear growth opportunity multiple times. But what is ANI doing to invest in and capture this growth opportunity? Number one, we're investing in high ROI commercial initiatives. We're building a new 90-person dedicated organization to expand our reach to patients with severe acute gouty arthritis flares and we expect to deploy this 90% organization in the middle of '26. We're generating scientific and clinical evidence. As an example, we're advancing a Phase IV clinical trial for Cortrophin in gout, and we're enhancing convenience. We launched a prefilled syringe in '25 and we continue to explore opportunities to further enhance patient convenience.

With this, with these investments, we're continuing to see very strong growth. In '26, we'll see 55% to 65% growth with Cortrophin growing to $540 million to $575 million. And what's important to emphasize is there's a significant growth runway beyond this in the overall ACTH market by growing the market, right? This is -- all of our initiatives are aimed at growing the ACTH market and capturing the underpenetrated addressable market that we had highlighted before.

So let me tell you about the gout expansion. As I've mentioned before, there are about 285,000 patients that we believe are in our addressable market. And we are expanding and creating a 90-person commercial organization to go service these patients and meet and address this unmet need. So why gout, right? Well, number one, as I said, there's a large addressable patient population, the most severe patients, 285,000. Number two, we are the only approved ACTH therapy for acute gouty arthritis flares. Our competitor does not have this indication. We have a proven track record. The gout indication generated approximately 15% of our usage in 2025 from nephrologists and rheumatologists.

In '25, we also ran 10 success -- across 10 territories, we ran pilots to explore the opportunity for expansion in primary care and podiatry, and we've had them be very successful. And that gave us further confidence to deploy this new 90-person commercial organization. We're also investing in evidence generation through the Phase IV trial to expand the use over time. We're really looking forward to this opportunity, and we'll update you as we build the team and deploy the 90-person organization in -- by the middle of the year.

Let me move to our second asset, ILUVIEN. It's a long-acting therapy, ocular therapy approved for DME and chronic NIU-PS. It's an implant -- intravitreal implant that provides continuous microdosing of fluocinolone acetonide in patients with retinal disease, 2 indications, diabetic macular edema. Again, greater than 50,000 patients in the U.S. that are not well served by anti-VEGF therapy, and we have less than 5,000 patients starts annually for DME in the U.S. with ILUVIEN. So representing a long -- a large growth opportunity. It's also true in chronic NIU-PS where that's noninfectious uveitis affecting the posterior segment of the eye, where there are greater than 75,000 patients in the U.S. that are candidates for this treatment and less than 5,000 that receive ILUVIEN annually, again, giving a long runway for growth.

In '26, we'll focus on returning ILUVIEN to growth by leveraging our established commercial and patient access initiatives. We're making new strategic investments in marketing and medical affairs to support increased awareness of the NEW DAY clinical study data, that clinical study read out in the middle of '25 and we're making investments to support the increased awareness of the study for ILUVIEN in DME.

We're also strengthening the commercial team and further enhance promotional efforts with a ramped-up peer-to-peer education program, new promotional materials and a strengthened commercial team. And we're growing the use of alternative access channels to navigate the market access challenges that Medicare patients faced in '25.

Next, we move to our generics business. Our generics business drives strong cash flow generation. It's a high-performing business with superior R&D capabilities, 3 U.S.-based manufacturing facilities and operational excellence. We have a robust pipeline in place to deliver 10 to 15 new product launches annually. We invest high single-digit percentage of generic sales in R&D for generics. We have a strong operational backbone. We manufacture and supply over 2.5 billion doses of therapeutics. That's what we did in the last 12 months to patients in the U.S. And as you can see, we've consistently delivered very strong growth. And in '25, we delivered low 20% -- our growth was in the low 20s.

Over 90% of ANI's revenues comes from finished goods that are manufactured in the U.S. with only 5% -- approximately 5% of revenues having a direct reliance on China. And as I mentioned before, we have 3 manufacturing facilities in the U.S., all with a strong GMP track record, 2 in Baudette, Minnesota and 1 in East Windsor, New Jersey.

So in summary, ANI is well positioned to deliver strong long-term growth and value creation. Our 2026 strategic priorities are to accelerate the transformation into making ANI a leading rare disease company, continued excellence in generics, R&D and operations and executing a disciplined capital allocation strategy. We have a virtuous cycle of growth that drives the transformation of ANI with rare disease account expected to present approximately 60% of total revenues in 2026 with our lead asset Cortrophin growing 60% year-over-year in '26 with substantial multiyear growth opportunity ahead and a strong generics business that's generating cash flows that we're reinvesting to expand ANI's rare disease business.

And from a financial strength perspective, we're over $1 billion in revenues, $275 million to $290 million in adjusted non-GAAP EBITDA. We'll have approximately $285 million in cash on the balance sheet as of 12/31 and less than 1.7 turns of net leverage. So that's ANI in summary, and with that, I'll ask Ekaterina to ask any questions.

Yes. Sure. And I guess, let me start with the 2026 outlook you provided. Just talk about some of the pushes and pulls as you think about the business?

Yes. So thank you, Ekaterina, for the question. In 2026, we will exceed $1 billion in revenue for the first time with rare disease accounting for more than 60% of the revenues. Our lead asset, Cortrophin will see strong growth, delivering 55% to 65% growth. And that growth will come from the existing indications or core indications that we're in rheumatology, nephrology, neurology, pulmonology and ophthalmology as well as the expansion into gout, where we're launching a 90-person team to drive the growth in launch -- sorry, to drive the growth in gout, specifically within primary care and podiatry.

And then as we think of profitability, you will see that we maintain profitability in '26 from an EBITDA margin level despite investing over $50 million in this expansion for gout with incremental OpEx. Yes.

And then on Cortrophin just specifically, I mean, 60% is a very nice number, and I think more than, I think, most people were expecting. Just main drivers of this? And how should we think about maybe quarterly gating or just anything else you keep in mind for that product for future?

Sure. Yes, we'll address the quarterly cadence when we get to the 4Q earnings, but in terms of where will this growth come from? We did an expansion of our commercial team in 2025, and we saw some impact from that in 2025 itself, but the majority of -- or we will get the full year impact and additional impact from that expansion in '26. So a good portion of the growth from '25 to '26 will come from the expansion that was done in '25. And in '26 -- and then additional growth will come from the setting up of the team to pursue acute gouty arthritis flares in primary care and podiatry, but that team will deploy midyear. So it will start delivering towards the back half of the year, and will have a full scale impact in '27 and '28. So we will get operating leverage on the investments in that -- in this expansion as we move forward. Yes.

No, that makes sense. And then just looking back -- earlier question, but looking back to '25, if you think about both Cortrophin Gel and Acthar and growth really stepped up. Just looking back, how much of that was the introduction of the prefilled in the pen. How much of that was maybe some kind of more reps representing both products and some of the Part D changes. Just talk about the mix of what do you think cost the entire market to step up?

Sure. Yes. Look, it's really the patient population. There is a real unmet need here. ACTH is used as a late-line treatment for patients for whom other therapeutics are not working who are refractory or have high side effects with other therapeutics. And so it's a late line treatment option. And really what's driven the growth is the unmet medical need and the patient populations as we've shown across indications that can benefit from ACTH therapy. That's the primary driver of the growth. And then -- and it's really, again, from our perspective, this is really about market growth. And with both companies creating increased awareness of the ACTH category, both -- with clinicians and patients are benefiting from the efforts of both companies.

You asked about the prefilled syringe. I think the prefilled syringe has taken on a much more widespread adoption than we had originally planned. Initially, we thought that the prefilled syringe was intended for patients with dexterity issues or visual impairment, but we've seen more widespread adoption. We've talked about 70% of our enrollments in Q3 were for the prefilled syringe and that momentum continues. But that's a presentation choice. The underlying growth is driven by the patient need.

And then you talked about IRA. We've seen a moderate positive impact from IRA. I believe the competitor has seen a tailwind from IR. So I think those are the drivers of growth. But again, main driver for Cortrophin -- for ACTH market and Cortrophin growth in '25 was the underlying unmet need and patient demand, and that will persist and that's what gives the runway for growth for the ACTH market and for Cortrophin.

And would you say there's like any 2 to 3 indications that are kind of driving most of it? Or is it like broad-based kind of across indications?

Yes. Really, it's broad-based across indications. We saw growth in '25 across the core indications. When we launched in '22, we focused on neurology, nephrology and rheumatology and then over time, we've expanded into ophthalmology and pulmonology. And we really -- if you call these are foundational indications, we see growth across all of these indications. We see growth in existing prescribers and new prescribers. We've talked about 50% of our prescribers are folks that were naive to ACTH.

So that's enabled us to reach newer patient populations. And gout right, has grown to be, it's an indication that only we have. It's growing to be about 15% of our volume. A lot of that volume in '25 came from specialists such as rheumatologists and nephrologists. And then we had the pilots that we did in 10 territories, which drove some growth, but again, small -- at a small level, now we're really going after that opportunity with the team expansion. Yes.

And going back to kind of like the broader class. Obviously, we've seen a lot of growth. I think we're actually approaching the previous $1.2 billion peak. Just how big do you think this class can become over time, $2 billion, $2.5 billion, $3 billion?

Yes. We're not giving multiyear guidance today. I think that -- I think what I can say is we do not see -- we see significant growth opportunity for the category, driven by the patient demand and the unmet need. And getting to $2 billion, $2.5 billion or double of where the previous peak was, we don't see significant barriers to the market growing there. And really, the conversations internally are just about expanding the patient pools that we're reaching, as seen by our investment in growing the market. So this is all about market growth for us.

And then talk a little bit about the data generation angle. Just as you think about Cortrophin Gel, I know you're doing a study in acute gout. Are there any other indications where you think doing some Phase IV might make sense?

Yes, so we're -- since we've launched, we've actually been generating data of clinical -- sorry, data of 2 types. First is preclinical data, which supports the differentiated mechanism of action, the nonsteroidal mechanism of action of Cortrophin and that's been support -- been helping, and we're doing this across indications and supporting the clinicians and their decisions on where to use Cortrophin. And then more recently, we've launched the Phase IV study for acute gouty arthritis flares with Dr. Hyon Choi in Mass General, and we believe that, that will generate additional data to support the use of Cortrophin in acute gouty arthritis and potentially adopted into the ACR treatment guidelines.

And then your decision to kind of invest in the dedicated gout sales force. You talked about this, but maybe you can just elaborate what type of positions you're going to be targeting? And how will this fit into your existing infrastructure?

Sure. So as we -- as I said, we -- there was about 15% of our volume that comes -- it came in '25 from acute gouty arthritis. But that really came from specialists, really rheumatologists and nephrologists. And as we were exploring how do we serve more patients, capture more of these 285,000 patients that are in our addressable market. What we realized is there is this trend of patients going more to internal medicine and podiatrists because it's tough to get to specialists or it's increasingly harder to get appointments with specialists. And so we ran this pilot in 10 territories where we asked our teams to pursue these 2, internal medicine and podiatrists.

And we found that there is a subset of internal medicine or primary care and podiatrist that serve more patients with severe acute gouty arthritis. And so we've identified about 7,000 targets, physicians that treat more patients that -- from acute -- sorry, that suffer from severe flares. And our team is aimed at, that we're building, is aimed at reaching these prescribers and therefore, accessing the broader patient population.

And then just one last question, if I may, on Cortrophin Gel. Just competition, anything on the horizon out there that you're kind of watching? Or is there some sort of kind of generics pathway or just anything you're kind of thinking about there?

Sure, we believe this category and both the ACTH.

Category, both products are very tough to genericize. They're naturally made. It's a complex formulation. There have been efforts made to genericize. So there are both regulatory as well as IP challenges. Both companies have IP that go into the 2040s, multiple Orange Book-listed patents. And we're also continuing to monitor alternate pathways that companies may be pursuing. Obviously, as the category keeps getting bigger and more people become informed about the unmet need, there may be more interest into the category, but we do not see anything on the horizon.

And switching gears to the ophthalmology business. Obviously, if you think about YUTIQ ILUVIEN, 2025 was a bit of a challenging year, not just for those products for I think a few others. But just elaborate a bit on what you're expecting '26 6 specifically what you're kind of factoring in for the foundation level funding and just anything else you kind of keep in mind as we think about the recovery of that franchise?

Sure. So we -- our initiatives for ILUVIEN really started in '25 as we call that a reset year for ILUVIEN. And those initiatives have taken shape. We have a stronger commercial team in place. We have a ramped-up peer-to-peer education program with new promotional materials that will start rolling out in '26. We are spending additional time in bringing the -- and in strategic investments to bring the results of the NEW DAY Clinical Study in DME for ILUVIEN to a broader set of clinicians. And all of these initiatives, along with the alternative access pathways for patients that have the co-pay challenges in Medicare will help us return ILUVIEN to growth.

It is a key priority of us in '26 to return ILUVIEN to growth. And as you can see in the Q4 results and we're starting to see that traction, and we will look to build on that as we move forward in 2026. As far as our guidance for '26 goes, it assumes no return to funding for the -- for foundations that support co-pay for Medicare.

And I just feel that, that funding issue, I mean, it's having such a big impact on the market. Is there anything you can do to kind of address it or there's some ways to kind of go around it? Just anything -- because I know that piece of it is outside of your control, but is there anything you can just kind of avoid the issue, I guess?

Sure. So the -- we are exploring alternate access pathways. So there are patients -- the patients that are impacted here are patients with Medicare Part B. But some of those patients also have Medicare Part D. So they have the drug benefit. And when they have the drug benefit, we work with the physician offices, and we've been doing this since early '25 when the funding issue -- the foundation funding issue initiated. And what we found is that there are offices that are willing to explore this alternative pathway. There is additional workflow needed for this pathway, but there are offices that are willing to explore that. And we see an increasing use of that. In terms of getting the foundation funding at the level that is needed to support the patients. I think that, that is probably -- there are probably more zeros required there than anything ANI Pharmaceuticals can help with.

Fair enough and then just as you think about taking a step back, has your peak sales kind of potential for this franchise changed at all? Is this kind of more just like near-term kind of issues or how you're thinking kind of changed about the longer-term opportunity here?

No, absolutely not. I think that both in DME and NIU-PS, there are patients that can benefit from this treatment. In noninfectious uveitis, steroids are the standard of care and there's less than 5,000 patients being treated with, and we believe there's about 75,000 patients that could be in the addressable market. And then in DME, there are less than -- there are 53,000 patients roughly that have shown suboptimal response to anti-VEGF and show positive response to steroid trial. That's the addressable market. And again, we're scratching the surface with less than 5,000 patients being treated. So no change in our opinion on the larger opportunity, yes.

And then switching gears again to generics, you're obviously lapping some major launches in '25. What should we expect on 26? And do you think you have enough in the pipeline to kind of offset, I think, Motegrity and also the partnered launch that you had in Q3?

Yes. So generics has been a strong cash flow generator for us. We invest high single-digit percentage of generic sales into R&D, and we will continue doing that. And it will give us a -- maintain the current cadence of our 10 to 15 launches annually. When you come into '26 guidance, we believe with the very strong year that we had in '25, where we delivered low 20% growth. And over the long term, as investors will know, we talk about delivering high single digit, low double-digit growth in generics.

So in '25, we really delivered a 2-year growth, right? And so in '26 the numbers will -- and we'll speak more about this as we get to the Q4 earnings, the generics will largely be flattish versus the '25 number, but our current cadence of launches will continue. We believe that in high confidence in the superior R&D capabilities and the same R&D capabilities that got us Prucalopride, will continue delivering for us in our generics business.

And actually, that was going to be my next question. Is this kind of -- how sustainable is this kind of cadence of launches? Is this kind of like a pocket of like a lot of launches and then it kind of tapers off? Or do you think that you can kind of keep doing the 10% to 15% kind of...

No, I think it's -- in generics and for ANI, the cadence of new product launches is critical. We will continue to invest high single-digit percentage of sales in generics R&D to maintain this cadence of launches and to continue supporting the growth. And over the -- beyond '26, we continue to see the high single-digit, low double-digit growth. And I mean, just for reference point, we've doubled our generics business in the last 4 years. So we've delivered -- even though we orient to high single-digit, low double-digit growth, we've actually delivered much higher growth rate compared to that.

Yes. And then in the last few minutes, I don't want to talk about margins for a little bit. How do you see margins evolving beyond '26. Cortrophin Gel is obviously growing coming in at higher gross margins. Just how much of the upside do you think flows through versus kind of gets reinvested in the business?

Sure. So we -- ANI is very committed to driving growth and balancing that with profitability. So when you look at '26 as an example, right, at the gross margin level, our gross margins are down a little bit from '25. Our guidance was 61% to 62% versus that in '26, our guidance is 59.3% to 60.3%. But if you look at the bottom line, right, even in a year where we're investing in this -- investing about $50 million for this expansion of the Cortrophin gout organization, we're still maintaining an EBITDA percentage of 26%. And so managing the bottom line and bottom line percentage is really important.

And as you look forward from '26, remember, I said that this organization that we're investing in, the real impact is going to come in '27. So we're making the investment and we'll get the operating leverage that will drive EBITDA margin expansion in the subsequent years.

So that's really important. And just coming back to the gross margin, just to make sure I address that. The year-over-year change is really driven by three things. Number one is, we had the Prucalopride launch, which was a 180-day exclusivity, a generic launch that really had brand type gross margins to it. Second was we had brands upside in '25 that will at least are not factored in the current guidance. And then third, for Cortrophin, the royalty that we -- that is due to Merck on that is increasing in '26 from low 20s in '25 to high 20s in '26. And so that -- if you take those 3 things into account, that's what's driving the shift. But again, very importantly, the EBITDA percentage, which is what drops to the bottom line, we've maintained that in an investment year. That's not to be lost.

In an investment year where we're putting $50 million, we're maintaining the bottom line percentage. And when you look at EBITDA growth, right? The top line growth is 24% to 27% -- 24% to 28%. The EBITDA growth is 24% to 27%. So we're ensuring that as we grow, we're balancing profitability.

And then just business development, current appetite, what kind of assets are you interested in just in terms of development risk, if you're willing to take on any of that and just scale? Just talk about priorities there.

So from a capital allocation perspective, balance sheet investments will go towards rare disease to expand scope and scale of our rare disease business. We believe that the next acquisition will likely be a commercial asset or one that is -- that does not have clinical risk to it. We may adopt some regulatory risk, but unlikely we'll adopt something with clinical risk. And look, we have the benefit of two sets of opportunities, one with call points into different indications that gives us a broader aperture, but also a very strong backbone, rare disease backbone across medical affairs, patient support, market access that can also be leveraged even if there's not call point synergy. But that's the types of assets that we'll be looking to. Yes.

And just as you think about capital allocation going forward, you're generating a lot of cash flow, just priorities as you think about the mix between like BD, maybe share repo or anything else you're kind of considering?

Steve.

Yes. We're quite pleased with the cash flow generation in 2025. We generated $140 million of net cash, bringing our cash balance to $285 million at year-end. We were net levered 1.7x as of September, and you'll expect that we'll be delevering a touch off that point when we report full results in February. We expect to allocate our cash and capital to expanding the rare disease business and we expect very healthy cash flows in 2026. And at this point, continue to accrue that cash to the balance sheet to support the future BD and M&A aspirations on the rare disease side of the business.

Perfect. And I think we're right about time. So thank you so much.

Thank you. Thank you, everybody.

Good morning, everyone, and welcome to today's ANI Pharmaceuticals Third Quarter 2025 Earnings Results Call. Please note, this call is being recorded. [Operator Instructions] It is now my pleasure to turn the conference over to Ms. Courtney Mogerley, Investor Relations. Please go ahead, ma'am.

Thank you, operator. Welcome to ANI Pharmaceuticals Q3 2025 Earnings Results Call. This is Courtney Mogerley, Investor Relations for ANI. With me on today's call are Nikhil Lalwani, President and Chief Executive Officer; Stephen Carey, Chief Financial Officer; and Chris Mutz, Senior Vice President and Head of ANI's Rare Disease Business. You can also access the webcast of this call through the Investors section of the ANI website at anipharmaceuticals.com.

Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to ANI Pharmaceuticals management as of today and involve risks and uncertainties, including those noted in our press release issued this morning and our filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. ANI specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.

The archived webcast will be available for 30 days on our website, anipharmaceuticals.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on November 7, 2025. Since then, ANI may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I will turn the call over to Nikhil Lalwani.

Thank you, Courtney. Good morning, everyone, and thank you for joining us. The third quarter was another remarkable quarter for ANI Pharmaceuticals, marked by record revenue, adjusted EBITDA and adjusted EPS, all driven by continued momentum across our Rare Disease and Generics business units. We grew total company revenues by 54% year-over-year and 46% on an organic basis. In addition, we nearly doubled Cortrophin Gel net revenue compared to the third quarter of 2024 and generated adjusted EBITDA growth of 70% year-over-year.

Based on our very strong third quarter performance and future outlook, we are pleased to raise our top and bottom line 2025 financial guidance. Compared to 2024, we now expect to grow 2025 net revenues 39% to 42% and 34% to 37% on an organic basis, with Rare Disease becoming essentially half of our total revenues for the year. We expect our lead Rare Disease asset, Cortrophin Gel, to grow 75% to 78% year-over-year to generate revenues of $347 million to $352 million. We expect to grow adjusted EBITDA between 42% and 46% compared to 2024. Later in the call, Steve will provide more detail on our increased guidance. Growing our Rare Disease business is a top strategic priority for us, creating long-term value for our stakeholders and advancing our purpose of serving patients, improving lives.

Turning to our lead Rare Disease asset, Cortrophin Gel. To drive strong multiyear growth, we are focused on clinical evidence generation to support physician decision-making, investments to enhance patient convenience and high ROI commercial efforts to drive growth. Our team has made significant progress on these initiatives to grow Cortrophin Gel across our target specialties.

In the first quarter, we expanded our portfolio of sales team, and we're seeing very positive results, highlighted by our strong momentum in new cases initiated and growth in new patient starts. We also launched the prefilled syringe in the second quarter, reducing administration steps for patients. We're seeing sizable increased demand for the prefilled syringe and expect it to be an important growth driver. Importantly, to support our commercial team's efforts to drive awareness for Cortrophin Gel, we are committed to generating data to help clinicians, patients and payers make informed treatment decisions, including a Phase IV clinical trial in acute gouty arthritis flares preclinical data on Cortrophin Gel's mechanism of action across multiple disease states and presentations and publications at prominent medical meetings.

We remain confident in the strong multiyear growth trajectory of Cortrophin based on ACTH market has returned to growth following the launch of Cortrophin in 2022 and is expected to increase approximately 40% to [indiscernible] with Cortrophin growing by 75% to 78%.

Despite this growth, we believe that the addressable patient populations across key indications are significantly underpenetrated. For example, the addressable patient population for acute gouty arthritis alone is 285,000 patients, an indication that is unique to Cortrophin Gel's label. Importantly, the number of Cortrophin Gel prescribers who were previously naive to ACTH represent approximately half of our total prescriber base, and this group continues to grow.

Turning now to our Retina portfolio. ILUVIEN sales in the third quarter were lower due to the further impact from the continued reduced access for Medicare patients and the utilization of the remaining YUTIQ units at physician offices. In addition, adoption of ILUVIEN for NIU-PS began in the third quarter, and the company continued to make tangible progress towards full adoption of the label transition.

We see 2025 as a reset year for ILUVIEN and believe that we can grow in 2026 and beyond for several reasons. First, we believe the addressable patient populations for ILUVIEN in both DME and NIU-PS are at least 10x the current number of patients treated with ILUVIEN.

Second, we expect to see the ensuing results of our strengthened and more experienced ophthalmology organization that is coalescing and deploying an expanded peer-to-peer education program, speaker education program and new marketing initiatives. In addition, we continue to disseminate and contextualize findings of the NEW DAY clinical study and create greater awareness on the potential use of ILUVIEN.

Lastly, we are seeing signs that there is a growing number of physician offices exploring alternative access pathways, including Medicare Part D through specialty pharmacy. This is the path we use for Cortrophin.

Moving now to our Generics business. We had a very strong third quarter performance due to an opportunistic partner generic launch that occurred in the second half of the third quarter. This launch once again highlights our strength in creativity, R&D, business development, operations and execution intrinsic to ANI's Generics business, and we will continue to leverage these strengths to unlock future opportunities. Based upon upside from this launch, we expect Generics growth for the full year in the low 20% range. We're proud of the continued execution of our Generics business and how it provides ongoing foundational support that enables us to invest in our initiatives to grow our Rare Disease business.

In summary, we delivered another record quarter, driven by strong performance across our Rare Disease and Generics business. As we head into 2026, we expect our virtuous cycle of growth to persist. Rare Disease is our primary focus area and largest driver of growth. We expect continued strong momentum in Cortrophin and positive impact from multiple initiatives outlined to grow ILUVIEN in 2026. In addition, we will continue to explore inorganic opportunities to expand the scope and scale of our Rare Disease business. These efforts will be supported by continued performance in our Generics and Brands business.

I'll now turn the call over to Chris Mutz to discuss our Rare Disease business in more detail. Chris?

Thank you, Nikhil, and good morning, everyone. Echoing Nikhil, our Rare Disease team delivered another excellent quarter marked by continuing record demand for Cortrophin Gel. The number of cases initiated and new patient starts reached another record high, and we saw broad-based growth across all of our targeted specialties, rheumatology, nephrology, neurology, pulmonology and ophthalmology.

To capture the multiyear growth opportunity for Cortrophin Gel, we are focused on 3 key priorities. First, we are investing in high ROI commercial initiatives to fuel growth. In the first quarter of 2025, we expanded our portfolio of sales force by approximately 1/3, further optimizing their territories. Our expanded portfolio sales team added new prescribers and drove meaningful increases in new patient starts across our core specialties during the third quarter. In addition, our specialty-focused teams produced sizable growth in our newer areas of pulmonology and ophthalmology, and we believe we are still in the early stages of penetrating these therapeutic areas.

Cortrophin Gel prescribing for acute gouty arthritis flares remained a key driver in the third quarter. Notably, the acute gouty arthritis indication is unique to Cortrophin Gel's label among ACTH therapies and accounts for over 15% of Cortrophin Gel use. Further, the gout indication has contributed significantly to the growth of new prescribers, many of whom are historically unfamiliar with ACTH.

Turning to ophthalmology. We continue to realize meaningful revenue synergies and saw a record number of new patient starts and a 42% sequential quarterly increase in Cortrophin volumes. We believe there is further growth potential to expand awareness of Cortrophin for patients with severe allergic and inflammatory eye conditions.

Additionally, we continue to strive to enhance patient convenience. Our new Cortrophin prefilled syringe offering, which we launched in April, provides a simplified administration that we believe has been well received by patients and prescribers. The prefilled syringe continues to be an important growth driver for Cortrophin Gel.

And finally, we are investing in clinical evidence generation to support physician decision-making. As previously announced, we're conducting a Phase IV trial in acute gouty arthritis flares. We believe the 150-patient study will provide physicians with valuable insight on the treatment of acute gouty arthritis flares with Cortrophin Gel and could support positioning and treatment guidelines.

We continue to generate robust preclinical data for our key stakeholders on Cortrophin's differentiated mechanism of action across multiple disease states. This is an important growth initiative as we believe increasing the body of evidence supporting Cortrophin Gel's use across indications will help physicians make further informed treatment decisions.

Our preclinical study of Cortrophin Gel in uveitis that was presented earlier this year has been published in ocular immunology and inflammation. We also had a poster at the American College of Rheumatology 2025 Annual Meeting that highlighted preclinical data supporting the use of Cortrophin Gel for the treatment of inflammatory arthritis and its anti-inflammatory mechanism of action.

Additionally, a manuscript for a preclinical study of Cortrophin Gel in membranous nephropathy was accepted for publication in molecular therapy. The study demonstrates the steroid-independent mechanism of action of Cortrophin Gel in an animal model of membranous nephropathy, specifically its effect on the complement system, areas of significant interest in ongoing membranous nephropathy drug development. Subsequently, this publication was highlighted in a commentary paper in molecular therapy and presented at the American Society of Nephrology meeting.

Turning to our Retina franchise. We are making progress on multiple initiatives to improve ILUVIEN sales. Our commercial team is fully hired, onboarded and dedicated to educating and supporting the Retina community. We are strengthening our promotional efforts, including a ramp-up of new peer-to-peer educational speaker programs and the continued execution in the field with new marketing materials to increase the understanding of Retina physicians of ILUVIEN and its 2 indications.

In mid-June, we began promoting ILUVIEN under the combined label for chronic NIU-PS and DME. Our sales teams are educating customers across the country, and our market access team has worked with payers to establish coverage for ILUVIENs new chronic NIU-PS indication. 6 of the 7 Medicare administrative contractors, or MACs, have updated their policy to cover ILUVIEN for NIUPS, and we are working with the other contractors they update their policy. Among the top 20 commercial payers, all payers who have a policy specific to ILUVIEN have updated to reflect both DME and NIU-PS indications. We continue to receive positive clinician feedback on the convenience of a single product covering both indications.

Next, we have initiatives in place to help physician practices navigate the market access challenges for Medicare patients that have persisted since January 2025. As a reminder, patient support foundations such as Good Days did not receive sufficient funding for 2025, which affected their ability to assist Medicare patients with co-pay support across Retina products broadly. Our team has been gaining traction with HCPs with leading Retina practices exploring the pathway to get ILUVIEN accepted for appropriate eligible patients through Medicare Part D benefit using a specialty pharmacy. This is the same approach used for access to Cortrophin.

In addition, -- we continue to present the results of our NEW DAY study of ILUVIEN in patients with DME at numerous prominent medical meetings. This includes a late-breaking oral presentation at the American Academy of Ophthalmology 2025 meeting, a presentation at the American Society of Retina Specialists Annual Meeting and an oral presentation at the EU Retina Innovation Spotlight 2025 meeting. Looking forward, we are preparing to present these data at additional upcoming conferences to further disseminate and contextualize these findings.

With that, I'll turn the call over to Steve for the financial update. Steve?

Thanks, Chris, and good morning to everyone on the call. Today, I'll review our third quarter results and our revised guidance in more detail. We delivered strong top and bottom line growth, generated significant cash flows and are raising our 2025 financial guidance based on our exceptional performance this quarter.

ANI generated revenues of $227.8 million in the third quarter, up 53.6% over the prior year period. Revenues from Rare Disease and Brands were $129.1 million in the third quarter, nearly double the prior year period on an as-reported basis and up 82.2% on an organic basis, driven by growth in our Rare Disease franchise.

Rare Disease revenues were $118.5 million, up 109.9% from the prior year. Revenues from Cortrophin Gel were $101.9 million, up 93.8% from the prior year period, driven by increased volume on a record number of new patient starts. ILUVIEN net revenues were $16.6 million. Revenues for Brands were $10.7 million in the third quarter, up 16.1% versus the prior year period due to an increase in demand for certain products.

On a sequential basis, revenues were down $2.5 million as we saw the expected trend towards normalization in demand during the quarter. We expect that the normalization trend will continue and therefore, expect modestly lower demand in the fourth quarter.

Revenues for our Generics and Other segment were $98.7 million, an increase of 19.3% over the prior year period. Revenues for Generics were $94.4 million over the prior year period, driven by the successful launch of a partnered generic product in the second half of the third quarter that overcame our previous expectation for a sequential dip in Generics. Generics were up $4.1 million as compared to second quarter of 2025 due to the strength of this launch. Note that the gross margin for this partner generic product is lower than typical gross margin for our Generics portfolio given the profit share element with our partner.

Now moving down the P&L. As a reminder, when I speak to operating expenses, I will be referring to our non-GAAP expenses, which are detailed in Table 3 of our press release. Generally, our non-GAAP operating expenses exclude depreciation and amortization, stock-based compensation, certain costs related to litigation and M&A activity as well as certain noncash charges. Please refer to Table 3 for a reconciliation to our GAAP expenditures.

Non-GAAP cost of sales increased 56% to $92.9 million in the third quarter of 2025 compared to the prior year period, primarily due to net growth in sales volumes and significant growth of royalty-bearing products.

Non-GAAP gross margin was 59.2%, a decrease of 63 basis points from the prior year period, principally due to product mix, including the lower gross margins on our partnered generic product.

Non-GAAP research and development expenses were $11.8 million in the third quarter, an increase of 36% from the prior year period, driven by higher investment to support future growth of our Rare Disease and Generics businesses.

Non-GAAP selling, general and administrative expenses increased 41.1% to $63.6 million in the third quarter, driven by spend for our new larger ophthalmology sales team promoting Cortrophin Gel and ILUVIEN and continued investment in Rare Disease sales and marketing activities, including the expansion of the Rare Disease team in the first quarter.

Adjusted non-GAAP diluted earnings per share was $2.04 for the third quarter compared to $1.34 per share in the prior year period. Adjusted non-GAAP EBITDA for the third quarter was $59.6 million, up 69.8% compared to the prior year period. We ended the third quarter with $262.6 million in unrestricted cash, up from $217.8 million at the end of the second quarter and $144.9 million as of December 31 of the prior year.

Cash flow from operations was $44.1 million in the third quarter of this year and $154.9 million on a 9-month year-to-date basis. As of September 30, we had $633.1 million in principal value of outstanding debt, inclusive of our senior convertible notes and term loan. At the end of the third quarter, our gross leverage was 3x, and our net leverage was 1.7x our trailing 12-month adjusted non-GAAP EBITDA of $214.5 million.

During the third quarter, we concluded our 2021 PIPE financing transaction with Ampersand by converting all previously issued 25,000 shares of Series A convertible preferred stock to 602,900 shares of common stock. As of September 30, 2025, balance sheet, there were no further shares of Series A convertible preferred outstanding and all mandatory dividends were paid in full.

Now turning to our updated 2025 financial guidance. We are raising our guidance for total revenue, adjusted non-GAAP EBITDA and adjusted non-GAAP EPS based upon higher estimates for Cortrophin Gel net revenue and the continued outperformance of our Generics business, while tempering our ILUVIEN estimates. Our updated guidance is as follows: Full year 2025 net revenue of $854 million to $873 million, up from our prior guidance of $818 million to $843 million, representing year-over-year growth of approximately 39% to 42%. Cortrophin Gel net revenue of $347 million to $352 million, up from our prior guidance of $322 million to $329 million, representing year-over-year growth of 75% to 78%, driven by continued volume gains.

We continue to expect sequential growth of Cortrophin revenues in the fourth quarter. Combined ILUVIEN and YUTIQ net revenue of $73 million to $77 million versus our prior guidance of $87 million to $93 million. This guidance assumes no meaningful change in the co-pay funding gaps facing Medicare patients in Retina for the remainder of the year.

Generics revenue growth in the low 20% range, driven by strong contribution from new product launches. We expect Generics revenue in the fourth quarter to be down on a sequential basis due to competitive entrants into the market in which our third quarter partnered product competes in.

Adjusted non-GAAP EBITDA of $221 million to $228 million, up from our prior guidance of $213 million to $223 million, representing year-over-year growth of approximately 42% to 46%. Adjusted non-GAAP earnings per share between $7.37 and $7.64, up from our prior guidance of $6.98 and $7.35. We are revising our full fiscal year guidance for adjusted gross margin to 61% to 62% compared to our previous guidance of 63% to 64%, driven by the revised revenue mix in this morning's guidance with lower ILUVIEN and higher Generics forecast as compared to our previously issued guidance.

We currently anticipate a full year U.S. GAAP effective tax rate of approximately 21% to 22%. And consistent with prior quarters, we will tax effect non-GAAP adjustments for computation of adjusted non-GAAP diluted earnings per share using our estimated statutory rate of 26%. We now anticipate between 20.5 million and 20.7 million shares outstanding for the purpose of calculating full year non-GAAP diluted EPS.

Please note that in periods in which ANI common share price is greater than the conversion price of our underlying convertible debt of $74.11 and lower than the conversion price of our corresponding capped call transaction of $114.02 per share, we will exclude from our adjusted non-GAAP diluted EPS calculation, the dilutive shares included in the GAAP diluted EPS calculation, which are expected to be offset in full by the capped call transaction. The third quarter was the first reporting period in which this condition exists.

With that, I'll turn the call back to Nikhil.

Thank you, Steve. In closing, we made exceptional progress as we continue to execute on our strategic priorities. Rare Disease remains our top strategic area and primary driver of growth, and we'll focus our efforts on driving further growth in Cortrophin and improving ILUIVEN performance.

We are encouraged by our performance this quarter, having reached more patients with our portfolio of high-quality medicines, nearly doubling Cortrophin Gel net revenues compared to the third quarter of '24 and significantly growing both the top and bottom line, made possible by the efforts of our employees, customers, suppliers and investors and their dedication to our mission of serving patients, improving lives.

Operator, please open the line for questions.

[Operator Instructions] We'll go first this morning to Dennis ding of Jefferies.

One on Cortrophin. So Medicare Part D redesign lowered the catastrophic coverage limit this year, and that's been a big tailwind. But that also makes for a really tough comp next year where growth should be driven more organically and through expanding the breadth of prescribers. Do you agree with that take? And I guess, how much confidence do you have that you're able to do that with the sales force you have currently?

Thank you, Dennis. So I think I'll take your questions in 2 parts. First is what's the impact of IRA on 2025 and then how do we see this going forward? So I think, as you pointed out, IRA improves affordability and access for appropriate patients to needed medicines by capping the co-pays at $2,000 as well as introducing the ability to evenly spread the payments throughout the year.

Now we did see a modest tailwind from that. This is consistent with what we've said in the prior quarter. And the reason it's modest is while this did get additional patients on therapy, it was tempered by the mandatory Medicare manufacturer payments that we need to make. And so overall, Cortrophin saw a modest net positive impact from the Part D redesign through IRA.

And then as far as your second question on next year and going forward, look, it's we believe that there is significant multiyear growth opportunity for Cortrophin in 2026 and beyond. And that's driven by the -- really the strong underlying demand and the demand sort of is centered in the addressable populations, right? Addressable patient populations across key indications are significantly underpenetrated. For acute gaty arthritis alone, it's about 285,000 patients. And our ability to expand the market is highlighted by the fact that approximately half of our prescriber base had never used ACTH therapy before.

And as Chris had mentioned in his remarks, we continue to see growth from both the existing prescribers as well as new prescribers. So we remain confident of being able to reach the appropriate patients in need by working with the HCPs. Thank you, Dennis.

We'll go next now to Faisal Khurshid at Leerink Partners.

Could you speak a little bit more to what this kind of new partner generic product is? And then also what you expect for that in the fourth quarter and kind of going into 2026 as well? And then [indiscernible].

Thank you, Faisal. So for competitive reasons, we're not specifying the name of the partner generic. It's a product that we launched, obviously, as it's intended with another manufacturer. And we're able to capture -- be the sole generic for a period of time, a majority of which was in Q3. In Q4, we have seen some competition enter on that product. So that's why our guidance for Q4 for Generics is showing a sequential drop versus the much higher Q3 that we had. And because it's a partnered generic, it also has profit share in it, and therefore, the gross margins on that product are lower. Going into 2026, we will see at least the existing competition continue, and we look forward to updating you more on the guidance for 2026 in early next year.

Got it. Okay. And then on Cortrophin, are there any inventory or gross to net situations that we should be aware about just because it seems like the volume growth kind of outpaced the actual dollars growth in this quarter?

The Cortrophin Gel growth is driven by strong underlying demand, highest number of new patient starts and new cases initiated since launch, growth across all targeted specialties, the expanded portfolio of sales force that we did in the first quarter drove growth in nephrology, neurology and rheumatology gout, which is one of the newer target specialties now represents 15% of Cortrophin Gel use. That contributed significantly to the growth.

In fact, to the growth, not just in Cortrophin volume, but also to the growth of ACTH naive prescribers. And then the combined ophthalmology sales force continued to build momentum with a 42% increase in volume versus the second quarter of '25. And then underlying just from a presentation perspective, there's strong demand for the prefilled syringe with accounting for almost 70% of the new cases initiated. So it's strong underlying demand that's driving the growth in Cortrophin.

We'll go next now to David Amsellem at Piper Sandler.

So just a couple of quick ones for me. And I'm sorry if I missed this earlier in the prepared remarks. Can you talk about regarding Cortrophin, the growth trajectory in pulmonology and what portion of the mix that is? I think you talked about the other therapeutic areas.

And then secondly, just given just the wide label and all the different indications, where do you envision untapped opportunities that aren't really a big part of the current mix for the product?

And then lastly, I know this is a priority, but just wanted to get your latest thoughts on business development and M&A and how large of a transaction you'd contemplate given the current capital structure?

Yes. Thank you, David. So pulmonology and sarcoidosis is an important therapeutic area for us. We have a dedicated -- a smaller team but dedicated for pulmonology, and we are seeing growth in that area, too. Again, it's a smaller part of the overall Cortrophin picture at this time, but there is a significant growth opportunity there. And in pulmonology, we see a larger number of vials per patient. So I think that's another factor that makes pulmonology an important area for us. So that's on pulmonology.

Regarding the wide label, look, I think currently, as you have seen the addressable patient populations in the indications that we're addressing today is much larger than anything that we're penetrating today. And so our immediate focus is -- our near-term focus is on tapping these different opportunities. And it's across the board, right? It's in neurology, nephrology, rheumatology, we talked about gout, we talked about ophthalmology, the quarter-on-quarter growth. So there's multiple areas.

And part of -- as we think, as Chris thinks about where to drive the growth is where to make the high ROI commercial investments to achieve that growth because there's really -- we're fortunate that there's opportunities across specialties and that we're able to drive growth through existing prescribers as well as have new prescribers who've never -- some that are naive to ACTH and some that were never not even familiar with ACTH adopt Cortrophin or use them in their treatment paradigm for appropriate patients.

And then lastly, to your question on BD, we continue to explore opportunities to expand scope and scale our Rare Disease business. I think that our filters are similar to what they were last time, which is at this time, which is late stage or close to commercial or commercial. and synergistic with either our sales force, right? So call point synergy as was in the case of Alimera or leveraging the rest of our Rare Disease infrastructure, right, which is the market access, patient support, specialty pharmacy distribution and across the board there.

So that's how we think about BD efforts, and we're continuing to explore opportunities. But as I said, as I highlighted, if you look at even the growth this year, we had 34% to 37% growth based on our guidance organically, right? So -- and there's significant growth opportunity, both in Cortrophin and ILUVIEN. So we're not in a hurry to do a deal. We're wanting to make sure that we do the right deal as we expand the scope and scale of our Rare Disease business. Thank you, David.

We'll go next now to Vamil Divan at Guggenheim.

This is Daniel on for Vamil. Congrats on the quarter. So maybe just one question on Cortrophin. Maybe if you could expand a little bit on like what exactly currently is driving doctors to use this drug across these various indications. I know you mentioned that you're focused on generating more evidence around this mechanism now. But maybe currently with what you have, like who are the patients that doctors think are the right ones for Cortrophin versus other alternatives that are available for each of these different conditions?

Sure. And thank you, Daniel. So I'll start and then Chris can jump in. So Cortrophin is a late-line treatment for appropriate patients for which other therapies have been sort of less effective and the real sort of the standard of care and the treatment options that are varying by I guess, by specialty and by indication. So when it fits into the treatment algorithm, it sort of varies. But essentially, it's a late-line treatment option. It's used for -- also for patients that have with this nonsteroidal mechanism of action used for patients that are refractory to steroids or have a high side effect profile.

Chris, would you like to add anything?

Yes. No, I'd just say taking care of patients with autoimmune disorders is challenging. And thank goodness, there are a lot of great options across -- for physicians to use, right, disease-modifying therapies, new innovations across the spectrum and the patients we serve. But there are still patients -- select patients that are really tough to take care of. And physicians are coming to the kind of end of the road in terms of good options for those patients that they can rely on. And there's a significant number of those patients, as we've outlined, who need something different and a new choice of treatment. And I think that's where we focus on those we think there's -- that's a large patient population. It's a difficult-to-treat patient population, and we are just getting started.

We'll go next now to Gary Nachman with Raymond James.

Congrats on another strong quarter. So back on Cortrophin, you just added reps and saw a good ROI on that immediately. Is this market really that promotion sensitive? Maybe just characterize that a bit more? And are there still some pockets where you could add more reps? And would you do that in the near term given the great returns there? And then the prefilled syringe seems to be having a big impact on the acceleration. Was administration really that much of a factor that previously held back use? So just explain more why you're seeing such a benefit from the prefilled syringe helping growth.

Yes. I think, Gary, thank you for your questions. That first question on the impact of and impact of sales reps, I would say that the way we think about it is we expanded our -- the underlying patient demand is very high, right, versus anything that we're capturing. So there are opportunities to reach prescribers, right, that with our sales force, there's opportunities to get in front of more prescribers and spend more time with them that we can keep building on where we are.

So if you look at -- if you think about where we expanded the sales force, we had a combined sales force detailing into neurology, nephrology and rheumatology. And as you can imagine that even within a territory, it's tough to cover all 3 indications. So we expanded the number of sales reps in that area. And what that did is it reduced what's called windshield time and allowing the reps to spend more time speaking with docs about Cortrophin.

And yes, there is opportunity to -- across specialties, across indications as we think about increasing awareness for the appropriate patients of Cortrophin, there's certainly opportunity to do that across multiple areas, right, across the portfolio area, across gout, across ophthalmology. So ophthalmology, I think we're set with the combined sales force we have right now. But there's opportunities sort of across multiple specialties and something that we'll continue evaluating high ROI commercial efforts there. And then your second question on prefilled syringe.

Look, when we launched the prefilled syringe, we had expected that the prefilled syringe would be used for patients that had dexterity issues or issues with their eyesight. But as we're seeing this much greater adoption and it's across specialties, I think when given an option, I think prescribers are just prescribers and patients are choosing the reduced administration step because in the original or in the 5 ml vial, there are 2 steps to the administration. You have to obviously draw the drug from the vial and then administer it and have to use 2 different needles for doing so. So a prefilled syringe is -- it reduces that step in administration and has therefore driven more widespread adoption.

What it has done is there are prescribers that are sort of willing to try a prefilled syringe, probably a bit more than going to a 5 ml vial that requires -- which is a larger use. But I mean, essentially, the growth is coming from the strong underlying demand which would have been there also with the 5 ml vial and the 1 ml vial, the other presentations that are there, the adoption of the prefilled syringe has driven -- has been driven by just the reduced steps of administration.

We'll go next now to Ekaterina Knyazkova at JPMorgan.

Congrats on the quarter. So just a quick one for me. Just remind us how you're thinking about the durability of Cortrophin Gel over time. Just latest thoughts on the possibility of potential generic competition eventually emerging. And I'm not talking like next year, 5, 10, 15 years from now. I think there's obviously a lot of barriers to entry there. But just, I guess, as this class is becoming bigger and probably garnering more attention from potential generic manufacturers.

Sure. Thank you, Katrina. Yes, having a capability in Generics ourselves is we're able to sort of pretty -- we have expertise and capability in assessing the pathway to developing a generic. And our position sort of stays that given this is porcine derived and the mix of -- and the formulation that it is, what it will take to actually develop a generic, it's a very tough pathway. And that's why while many folks have tried it and have not succeeded. It's a very complex development, and there are examples of products like this that are that are tough to genericize. So we continue to believe in the long-term durability of either ACTH product being tough to genericize.

Yes. Sorry, one other thing I would highlight is both us and the competitor have also added patents, strengthened our IP around the products that go into the 2040s. So that's another point on durability. Thank you.

We'll go next now to Brandon Folkes with H.C. Wainwright.

Congrats on another good quarter. Nikhil, just following on from the prior question. Can you just remind us of the challenges of label expansion in the ACTH category for these products? Just sort of in the past, is this label expansion been a cost-benefit decision or practicality decision? And then just sort of any color in terms of if this market does double, the confidence around maintaining exclusivity on gout as a label claim? And then does that Phase IV data give you any potential additional IP around that?

Thank you, Brandon. I think that the -- our interaction -- on your question on label expansion, our interaction with the FDA suggests that any label expansion will need to follow the current rules of the FDA, which requires a Phase IV -- sorry, Phase III clinical trial and all the associated rules that are in place today. So that's what we'll need to do, and that's what our competitor will need to do, whether that's us trying to -- that's our understanding, whether that's us exploring infantile spasms or which is an indication they have that we don't or us exploring or them exploring acute gouty arthritis flares.

And then on the Phase IV data, look, that study was designed and is being executed more to inform and assist physicians in their treatment and hopefully, in their treatment decisions and hopefully could be included in the treatment guidelines, which can drive sort of further adoption.

We'll go next now to Leszek Sulewski at Truist Securities.

Three for me. So just to touch on the sales force again. What are some of the KPIs that you're tracking to back the rightsizing of this team? And what trends have you seen in the sales per rep from the sales force expansion? And any of these metrics would drive your reasoning to potentially increase the sales force?

And then second, can you provide any more color around that partner generic program? Are there additional opportunities in similar scope? Or is this a one-off situation?

And then third, maybe for Steve. As you close out the year, could we potentially anticipate an intangible asset impairment charge tied to the revaluation of the Alimera acquisition?

All right. Thank you for your questions, Les. So I think first is on the sales force. As we believe -- well, on the KPIs, we're going to -- we try to share information that's helpful to investors and competitively sensitive. So I'll steer away from the KPIs. But on the trends, I mean, there's clearly expansion of the sales force in the appropriate areas is a high ROI commercial effort as evidenced by the expansion that we did earlier this year for our portfolio sales team. So that's something that we will continue to evaluate and explore as we move forward.

On the partner generic -- yes, on the partner generic, there are definitely opportunities like that, ones that have been in the hopper that ones that we continue to work on. And it really just highlights our end-to-end capability, right, in BD, in R&D, in commercialization and obviously, in operational excellence.

So across the board, I think we're uniquely positioned with our U.S. manufacturing footprint, right, with more than 90% of our revenues coming from products that are made in the U.S. with our 3 manufacturing facilities that are in the U.S. So we're uniquely positioned from that standpoint. And we absolutely plan to and are already working on such opportunities to capture and to bring to market.

And then on the -- I think the ILUVIEN long-term question, I think that there is -- so beyond Q4 and 2026, we believe the addressable patient populations for ILUVIEN in both DME and NIU-PS are at least 10x the current number of patients currently being treated with ILUVIEN. We expect to see the results of our strengthened ophthalmology organization deploying the expanded peer-to-peer speaker education program and new marketing initiatives.

And then in addition, we continue to disseminate and contextualize the findings of the NEW DAY clinical study and create greater awareness on the potential use of ILUVIEN. So while we see 2025 as a reset year, we are confident in being able to drive growth in 2026 and beyond for ILUVIEN.

And Steve, I don't know if you want to add anything to Les' question with that backdrop.

Yes, I would only add that we evaluate all of our intangible assets on a quarterly basis. And the third quarter for ILUVIEN was no different and obviously, passed that testing in the third quarter. And as Nikhil just outlined, right, when we think about the mid- to long-term forecast for the product, we remain confident in the mid- to long-term opportunities as Nikhil just laid out.

And Mr. Lawani, it appears we have no further questions this morning. So I'd like to turn the conference back to you for any closing comments.

Thanks, everybody, for joining, and we look forward to updating you on our progress in the future. Thanks, everybody.

Thank you very much, Mr. Lawani. Again, ladies and gentlemen, that will conclude today's ANI Pharmaceuticals third quarter earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.

Okay. Good Afternoon, everybody. My name is Daniel Cohen. I'm a Managing Director in Morgan Stanley. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

With that, we can begin. We are pleased to host Nikhil Lalwani, CEO of ANI Pharmaceuticals with us today. Nikhil, why don't we start out by -- maybe if you can just give us a high-level overview of each of your businesses. You have multiple businesses under the ANI Pharmaceuticals umbrella. Talk about the different drivers in each segment and how investors should think about growth in those segments.

Thank you, Daniel, and good afternoon, everybody. Thank you for joining us here at the Morgan Stanley conference. Much like Daniel, let me clarify that any disclaimer -- any information I speak to is per the disclaimers on forward-looking statements in the corporate deck that we 8-K yesterday as well as references to non-GAAP information -- non-GAAP financial information. And then the guidance that I speak to is the guidance that we gave on August 8, 2025.

So with that, yes, really pleased to be here to share with you the ANI journey towards building a high-growth and profitable rare disease therapeutics business. We have 3 business segments. Rare disease is the key focus area and largest driver of growth. We have 2 assets, Cortrophin and ILUVIEN in the rare disease business. Rare disease will account for approximately 50% of 2025 revenues as per our guidance on August 8 and is our key focus area going forward, also the top priority for capital allocation.

We also have a generics business that has driven strong growth on the basis of superior new product launches by our strong R&D capability in generics, operational excellence and a U.S.-based manufacturing footprint that enables us to compete and do well in the U.S. generics market. And then we have a brands business, which plays a role of providing high margins, strong cash flow generation and we think of a virtuous cycle of growth where we're using EBITDA and cash flows from the generics and margin -- in the brands business to drive growth and increase in scope and scale of the rare disease business.

When you think about the total company in terms of guidance for the year, total revenues is $818 million to $843 million, adjusted non-GAAP EBITDA of $213 million to $223 million. The revenue that I just stated represents 33% to 37% estimated growth over last year, and the adjusted EBITDA is a 34% to 41% growth over last year. So that's an overview of ANI.

Are you able to talk a little bit about the differences in growth and margins between -- for each of those 3 segments?

Sure. So Cortrophin will be -- sorry, our rare disease business with Cortrophin and ILUVIEN will be the largest driver of growth and the key focus area. It's grown from -- when we launched Cortrophin, our lead asset in 2022 being 0 to half the company's revenues in 2025, where it will be -- rare disease will be $409 million to $422 million in terms of guidance. And then the generics, typically, we've guided to high single-digit, low double-digit type growth. And what we've actually delivered over the last 3 to 4 years is much higher than that. The guidance for 2025 is mid-teens growth versus the 2024 number of $301 million in revenues.

Yes. Pretty strong performance growth and margin-wise this year in particular. We note that you've raised guidance 3x this year. Can you talk a little bit about what has done better than anticipated this year?

Sure. Yes, really pleased with the performance this year and the ability to raise guidance 3x. In this year, some of the drivers that went better than anticipated was, number one, Cortrophin. And specifically Cortrophin Gel, we expanded our sales force in the first quarter of 2025 and the impact of that expanded sales force came sooner than anticipated or at a much more impact than earlier anticipated. Second is we launched a new presentation of Cortrophin, the prefilled syringe to enhance or enhance convenience for patients and HCPs. And there's a very strong demand that we've seen for the prefilled syringe.

Originally, we anticipated that the prefilled syringe would be used for patients that had dexterity issues or visual impairment. We're seeing a more widespread adoption of the prefilled syringe. We spoke about 70% of enrollments in July being for the prefilled syringe. So that's the second thing that went better than anticipated. And then the third is on acute gouty arthritis flares. We're continuing to see a strong ramp there amongst indications. That's an indication that only we have and the competitor, which is the only other ACTH drug in the category does not have, acute gouty arthritis flares. So that's on the rare disease and Cortrophin side.

On generics, we launched per our cadence of new product launches, we launched a generic to Mortegrity, prucalopride, in the first -- towards the end of last year in late December, early first quarter. And what we saw is full value of 6 months without the launch of an AG or any other competition entering the market. So we saw the full value of the first 6 months of prucalopride. So these are the really Cortrophin and the upside from generics driving the 3 raises that we've done in the year.

Okay. Great. Maybe just another high-level question before diving a little bit deeper into each of the segments. Some of the themes that are in investors' minds in terms of -- from a global perspective, how -- you mentioned the generics business as U.S. manufacturing capacity. You've also got a portfolio of rare disease drugs. How does the evolving tariff MFN situation, how does that impact each of your businesses?

Yes. ANI is very well positioned versus our peers with regards to both tariffs and MFN. ANI has been focused on the U.S. pharmaceutical industry and 95% of our revenues comes from products sold in the U.S. So that speaks to the MFN exposure. Only one product is sold outside the U.S., our retina product, ILUVIEN. And then we have a small number of one main product and then a couple of small generic products that are sold internationally, but less than 5% of revenues coming from outside the U.S.

When it comes to tariffs, over 90% of our products -- of our revenues comes from products that are manufactured in the U.S., right? We have 3 manufacturing facilities, 2 in Baudette, Minnesota and 1 in East Windsor, New Jersey. So a huge U.S. manufacturing footprint and a commitment to U.S. manufacturing and being part of the solution when there are disruptions in the supply chain and supporting American patients with U.S. manufactured products. And so from a tariff perspective, we are very well positioned because over -- again, over 90% of our revenues comes from products that are -- finished goods that are manufactured in the U.S.

Got it. Okay. Makes sense. Maybe just diving deeper on Cortrophin. Can you talk a little bit about that market and the competitive field in that market and some of the dynamics that you're experiencing right now?

Sure. So I think that the -- especially for investors that are new to ANI Pharmaceuticals, Cortrophin Gel, our lead product, is a repository corticotropin that is used to treat certain chronic autoimmune disorders and has multiple indications, almost over 20. We focus on 6 indications. And this ACTH market has only had one competitor for an extended period of time until we entered in 2022. And what we've seen is that since we entered, the market has most recently started growing again. It went through a period of deceleration, but has started growing again. The growth in 2024 was 27% and the growth in 2025, if you add our guidance and the competitors' guidance is 39%.

Most importantly, and the key driver of this growth is the underlying patient demand. So there are -- even today, the number of patients being treated are almost half the number of patients that were being treated when the market was at its peak in the past. And so what is most heartening to see is between our efforts and the competitors' efforts, we are able to get ACTH therapy to patients in need across indications.

Going beyond that, and we believe strongly that Cortrophin has a strong multiyear growth trajectory. And the reason we believe that is when you look across indications, even the 6 indications that we focus on, the addressable patient populations in each of those different therapeutic area -- in each of those different indications is much larger than anything than the patients that are being addressed by the combined efforts of the competitor and ourselves. So the growth opportunity is significant.

Reasons to believe that we will be able to capture more of that addressable patient population are as follows: Firstly, over the past 4 years, 50% of our prescribers are prescribers that were naive to ACTH. That is their first ACTH prescription was Cortrophin Gel. So we are able to reach more prescribers, talk to them about the appropriate patients and the benefits of ACTH therapy and have them use Cortrophin.

Second is that we see growth across specialties. It's not -- the growth is not coming from any one specialty. We have, as I said, 6 different indications, multiple sclerosis, rheumatoid arthritis, nephrotic syndrome, sarcoidosis and then a couple of ophthalmology indications and acute gouty arthritis flares. And so we see growth across indications. That's another reason to believe. And then third is we see growth from both new prescribers and existing prescribers. So all of these different factors enable us to see that the ACTH market, while it's returned back to growth, the addressable patient populations are much larger and that between our efforts and the efforts of the competitor, we're able to go out and get this therapeutic or this class of therapeutic to patients in need.

Can you talk a little bit about what happened in that market and before you kind of made a dip and now it's returning to growth. How should we think about that and the possibility for that happening in the future?

Sure. Look, I think this was obviously before we entered the market. So I have to be thoughtful about what I share here. What I can say comfortably is that the reasons for the decline were largely external to the product itself. The competitor had to deal with other issues when they were the sole -- had the sole product in the category. Other company-related issues that were not specific to the ACTH category. They had to deal with bankruptcy too that they've successfully worked through and congratulations to them on that.

And so the decline was driven by factors that had nothing to do with the efficacy of ACTH therapy. And that's what we've seen is when we've come back or when we've launched Cortrophin Gel, not only have we been able to convince ACTH believers to write Cortrophin, but also -- use Cortrophin for their appropriate patients, but also have new prescribers, right? Over 50% of our -- almost 50% of our prescribers are prescribers that had never used ACTH before.

You mentioned a new prefilled syringe and expanded sales force and that you have 6 indications out of 20 or more theoretical indications. Are there any other initiatives that one should be thinking about as we look out into the future around Cortrophin Gel?

Sure. So we believe in the strong multiyear growth trajectory for Cortrophin. Our guidance for this year is $322 million to $329 million. We think that there's -- we believe that there's strong multiyear growth potential beyond driven largely by the addressable patient population that we can capture. We're investing in 3 types of initiatives to strengthen the Cortrophin franchise and capture this multiyear growth. First is evidence generation and research. The evidence generation and research falls into 2 buckets.

First would be there's a bunch of work we're doing on preclinical to establish the mechanism of action or not establish, but share more information on the mechanism of action. We're fortunate to be able to do this with industry-leading KOLs that adds more credibility to the category and are able to show the nonsteroidal mechanism of action, which is a key part of growth in the ACTH category.

In addition, we launched a Phase IV clinical study for acute gouty arthritis flares. And our hope is that with a successful outcome there, we will be able to get Cortrophin added to the ASN guidelines. So that's number one, which is evidence generation and research.

Second is from a product presentation standpoint. So we've launched initially with a 5 ml vial, which was our original presentation, and then we launched a 1 ml vial. Cortrophin is self-administered. So the 5 ml vial was being used for self-administration. But for gout, the right dosing, acute gouty arthritis flares, the right dosing is a 1 ml vial. So we launched a 1 ml vial. And then most recently, in April of this year, as you referred to, Daniel, we launched a prefilled syringe, and this is really for patients that have dexterity issues or visual impairment. Now we've seen broad adoption of this. And we're continuing to work on other steps in the second group of presentations to improve patient and HCP convenience.

And then third is high ROI commercial initiatives, as you would expect, to continue expanding the Cortrophin market and capturing this addressable patient population that we have.

And is the prefilled syringe is that unique to Cortrophin Gel? Or is the competitor product have a similar prefilled syringe?

The competitor does have a self-check, what they call a self-check and we have the prefilled syringe.

Got it. Okay. Final question on Cortrophin for me. Can you talk about LOE risk of how you think about end of protection, if you will, for the product?

Sure. Yes, this is both the competitor, and we have a complex formulation of peptides that are derived from the -- that are porcine derived from the pituitary glands. And these mix of peptides are then dispersed in a gel. And therefore, this is a complex formulation that is hard to copy and show equivalence. And therefore, it is a tough drug to genericize. There are other analogs of animal-derived products that have been hard to genericize. So that's one level of protection.

And then the second level of protection is the -- both the competitor and us have added IP that goes into the 2040s into 2040 to 2043 that, again, provides additional protection against generics. So we are strong believers in the durability of the ACTH category and see this as a multiyear growth opportunity. And I would be remiss before we move on, on Cortrophin to again point out that even with all the growth that we've seen and that the competitor has seen, remember, the competitor is seeing 20% to 30% growth this year. Even with both of us, we're still treating a very insignificant part of the addressable patient population. And just as an example, if I may, right, if you take multiple sclerosis, there's 750,000 patients that get -- that have -- they're diagnosed with multiple sclerosis, only a small subset of that are patients that are -- that get exacerbations and do not respond to a steroid. So there's about 300,000 flares for MS that we think is an addressable patient population -- addressable population for ACTH and what we're treating is an insignificant.

And in our deck, in the new corporate deck on Slide 16, you'll see we lay that out across 5 indications, and that's a tremendous opportunity for getting patients in need the appropriate therapeutic that can be helpful as a late-line therapeutic through the efforts of both us and the competitor.

Okay. Anything else you want to cover?

No, I'm good on Cortrophin.

Happy to [indiscernible].

Thank you.

Okay. Good. Maybe let's shift to the ophthalmology portfolio. I think certainly, earlier in the year, in particular, there were some headwinds that impacted Medicare patients. Can you talk about -- a little bit about what changed this year? What are the headwinds? And where do we sit today?

Sure. So really 2025, we think of it as a bit of a reset year for our ophthalmology and retina franchise that we acquired from Alimera. And there's been a number of different factors. Obviously, the one that's most prominent and the biggest one is the nonavailability of co-pay support for Medicare patients that do not have any supplementary insurance. That funding went away in the early part of this year and has not returned.

And at this point, I think we're all -- every all organizations, ANI and other organizations in ophthalmology and retina are focused on finding solutions for the patients, assuming that this co-pay support doesn't come back. Now having said that, there are a number of organizations that have spoken about efforts to bring that co-pay support funding back. But at this point, our assumption in the guidance given on August 8 was that the co-pay support would not come back.

In addition, we had churn in our sales force as we combined the original Alimera sales force with the ANI ophthalmology team to create a combined sales force to sell both Cortrophin and ILUVIEN. We have all those replacements in place and we have a full team that's out there detailing both Cortrophin and ILUVIEN. In addition to strengthen that team, we have new marketing materials, a newly launched peer-to-peer marketing and speaker program. And then very importantly, we had NEW DAY, a Phase IV clinical study for ILUVIEN that was done, and we announced the results in July. And again, in this new corporate deck, we've detailed the publication and presentation plan that -- where we're presenting the results of NEW DAY. We presented at ASRS. We presented it at EURETINA and when we say we -- leading KOLs, right, Dr. Singer, Dr. Wykoff, Dr. Gonzalez. And we'll now present it at American Academy of Ophthalmology in a podium presentation and then at Hawaiian Eye.

So this is rich new set of data across 300-plus patients for the use of ILUVIEN early in the treatment of DME in conjunction with anti-VEGFs. So when you think of the ophthalmology and retina franchise as a whole, while we're working through challenges in 2025, and it's a bit of a reset year for the franchise, there's -- the underlying patient demand is very strong, both in DME and NIUPS. We're treating less than 5,000 patients out of more than 50,000 patients addressable in DME and more than 75,000 patients in NIUPS. And then equally important, we have a slew of these initiatives that I talked about, right?

The NEW DAY clinical study results, the new peer-to-peer speaker program, a stronger sales organization, all of these that will enable driving stronger performance as we move forward.

Okay. Anything else you want to cover on the ophthalmology franchise?

Yes. I would say the one other piece that we -- that I forgot to mention, thank you for that, Daniel, is that for ILUVIEN, we now -- for simplicity of supply chain and securing the supply chain, we added the NIUPS, non-infectious uveitis of posterior segment of the eye label -- indication to the ILUVIEN label that are now marketing just ILUVIEN, and that simplified the supply chain, and we're working through that transition in the third quarter.

Okay. So I wanted to shift to your generic business, which has been -- it's been a double-digit growth business for the past 2 years, which a little bit contrary to what others have seen perhaps in the U.S. generics market. And you've talked about mid-teens growth for this year. Can you talk a little bit about what differentiates your business relative to the broader U.S. generics sector?

Sure. So yes, we have been able to deliver almost 2.3 billion doses to American patients in the last 12 months of generic products. We do that on the back of a strong operational excellence and 3 U.S.-based manufacturing facilities, 2 in Baudette, Minnesota and 1 in East Windsor, New Jersey. So the U.S.-based manufacturing footprint is unique to ANI. All these 3 sites are in strong GMP status, strong GMP track record with either VAI or NAI status across these 3 sites.

And really, the crux of generic success is new product launches, right? Our pipeline, right, the product selection and then the execution of the pipeline and being able to consistently bring lower -- lesser competition products to the market quicker. We launched between 10 to 15 products every year. That's been our cadence across the last 4 to 5 years. And we've actually -- while we speak about high single-digit, low double-digit growth, in reality, we deliver even higher than that and have done consistently over the past 4 years. This year, we talk about mid-teen growth. I think -- and as an example of the strength of our R&D, we'll talk about prucalopride, which is a 180-day exclusivity and sole generic approval that we got earlier this year or late last year, earlier this year, where there were 12-plus competitors pursuing this product, and we were able to get the approval first and consequently get 180-day exclusivity.

So really strong pipeline selection, superior R&D execution and then an operational backbone that is strong and U.S.-based to support the generics business. That's the driver of success in our generics business.

Is the strategy in the generics business driven by 180-day exclusivities? Or is it broader than that?

No, no, it is broader than that. We -- I think we always try to find an angle on the pipeline selection. So whether it's the API, whether it's lesser competition, lesser focus areas. One of the things we benefit from is the scale as we were growing, we're now a $300 million business that's growing mid-teens. So the value of launches that is meaningful for us is different from what is meaningful to a much larger player. But so being able to identify those opportunities and then execute and capture those opportunities has been important.

Okay. How do you think about just shifting a little bit to close out? How do you think about capital allocation for the company?

Yes. Thank you. So we are focused on expanding the scope and scale of our rare disease business. We have a strong balance sheet with about $218 million of cash as of June 30, 2025, and 1.9 turns of net leverage, assuming the guidance that we gave on August 8. So that gives us a strong balance sheet and the ability to use that balance sheet to expand scope and scale of our rare disease business. And that is our focus area, identifying products that are synergistic with 1 of 2 things, right, either call point synergy with Cortrophin, like the Alimera acquisition where ophthalmology was a key focus area for Cortrophin. And so we found another product, ILUVIEN, that is synergistic from a call point standpoint.

And so we have that opportunity now in the other therapeutic areas, rheumatology, nephrology, neurology, pulmonology. What we also have is a capability in rare disease of using the back infrastructure, which is basically medical affairs, patient support, market access, especialty pharmacy distribution. And so finding rare disease assets that may not be synergistic from a call point perspective, but are -- can have small patient populations, small sales forces, maybe in a newer therapeutic area, but leverage the rest of the rare disease infrastructure that we have and the core capability we have. That's how we're looking for assets like that, too.

Two other things to add. We are in no hurry to do an acquisition next. We're obviously -- we have strong organic growth drivers and are exploring that. Having said that, we're continuing to explore, but there's no immediate need to do an acquisition. So that's one. And I think the second thing is in the terms of the type of acquisition we would look to in rare disease, we would look at commercial assets as a next step. And then as we continue to expand the scope and scale, taking appropriate sized clinical bets at some point in the future and building the development capability to as we build an integrated rare disease company in the future.

And how would you -- how do you see the market for whether it's product or company acquisitions right now? Is it particularly competitive? Or over the last few years, do you see it as being more or less competitive than it has been?

Yes. I think we're not the only people looking for rare disease assets. And the advantage we have is that we have beachheads in multiple therapeutic areas. So that's an advantage for us as we scan and look for assets. And then also, we have a strong performance and a strong balance sheet to support as we pursue our growth -- pursue our M&A strategy. And again, to recap, we're not under pressure from a time standpoint to do because we have organic growth opportunities to pursue an acquisition. So we can do it in the right time and take our time to do the right deal.

Thank you. Well, Nikhil, a lot of success from your leadership at ANI, proven ability to get products approved, make acquisitions and commercial success. So congratulations to you on all your success. Happy to open the floor to any questions if anybody has any. Feel free to raise your hand. If not, we can close there.

Thank you, Daniel, and thank you, everybody, for joining us, and we look forward to updating you on our progress in the future. Thank you.

Thank you.

Thank you.