ANI Pharma Reports Full Year 2016 Results And Fourth Quarter Results And Provides 2017 Guidance

BAUDETTE, Minn., March 2, 2017 /PRNewswire/ --

For the full year ended December 31, 2016:

• Record net revenues of $128.6 million, an increase of 69% versus the prior year
• GAAP net income of $3.9 million, including $6.7 million non-cash impairment charge for a non-core asset
• Diluted GAAP earnings per share of $0.34, including impact of non-cash impairment charge of $0.36, net of tax
• Adjusted non-GAAP EBITDA of $61.1 million
• Adjusted non-GAAP net income per diluted share of $3.78 (previous methodology)

For the fourth quarter 2016:

• Net revenues of $38.2 million, an increase of 112% as compared to the same period in 2015
• GAAP net loss of $1.1 million, including $6.7 million non-cash impairment charge for a non-core asset
• Diluted GAAP loss per share of $0.09, including impact of non-cash impairment charge of $0.36, net of tax
• Adjusted non-GAAP EBITDA of $17.9 million
• Adjusted non-GAAP net income per diluted share of $0.84 (previous methodology)

Guidance for 2017:

• Net revenues of $181 million to $190 million
• Adjusted non-GAAP EBITDA of $73.1 million to $77.2 million
• New adjusted non-GAAP diluted earnings per share methodology yielding $3.58 to $3.94 per share, as compared to $2.96 per share for 2016 as calculated under the new methodology

ANI Pharmaceuticals, Inc. ("ANI") (NASDAQ: ANIP) today reported its financial results for the three and twelve months ended December 31, 2016, and provided its financial guidance for the 2017 year. The Company will host its earnings conference call this morning, March 2, 2017, at 10:30 AM ET. Investors and other interested parties can join the call by dialing (866) 776-8875. The conference ID is 51451144.

Financial Summary

Arthur S. Przybyl, President and CEO, stated,

"ANI had a record year in 2016. Our annual revenues increased 69% to $128.6 million and our annual adjusted non-GAAP EBITDA increased 41% to $61.1 million. In the fourth quarter, revenue increased 112% to $38.2 million and adjusted non-GAAP EBITDA increased 88% to $17.9 million. We continue to regard revenue and adjusted non-GAAP EBITDA as important valuation metrics for ANI. In fact, our reported revenues, adjusted non-GAAP EBITDA, and operating cash flows all established new records for ANI in 2016. ANI generated $27.5 million in operating cash flows and we invested $4.6 million in capital expenditures in 2016.

"Our revenue and adjusted non-GAAP EBITDA growth in 2016 was fueled by several important factors: we launched several products, acquired the NDA for Inderal® LA, and acquired licenses to distribute HC rectal cream and the authorized generic of Lipofen®. We exited 2016 with 25 commercial products, up from 16 at the beginning of the year. To support this growth, and our future growth plans, we hired 45 full time employees in 2016, increasing our overall headcount by 32% primarily to support our manufacturing facilities in Minnesota. All but one of our finished dosage form products are manufactured in the United States. Importantly, we acquired the NDAs for Corticotropin and Corticotropin-Zinc in early 2016 and have advanced the re-commercialization project by hiring our project team, establishing our analytical labs, sourcing porcine pituitaries, and selecting our raw material manufacturer. As a result, work has already begun on the manufacturing of development lots of raw material and advancing chemistry and analytical development, as we reference in our Corticotropin Re-commercialization Update. 

"Forecasting 2017, we are providing annual guidance that indicates continued revenue and adjusted non-GAAP EBITDA growth. The midpoint of our 2017 guidance assumes revenue growth of 44% to $185.5 million and adjusted non-GAAP EBITDA growth of 23% to $75.1 million. We have a robust pipeline of product opportunities and anticipate launching several new products in 2017. We remain strategically committed to advancing our growth through selective acquisitions, and to this end, we recently acquired the Inderal® XL and InnoPran XL® products. We are forecasting approximately $40 to $45 million in operating cash flow and expect to invest upwards of $11 million in capital expenditures in 2017. Our investment in R&D is increasing primarily due to Corticotropin project activities. The balance sheet remains strong; we are levered approximately two times and have access to additional liquidity for potential future transactions.

"Management's 2017 commitment to our shareholders remains the same as 2016: to continue to grow revenues and adjusted non-GAAP EBITDA and to advance Corticotropin to an eventual sNDA filing." 

2017 Financial Guidance

ANI's estimates are based on projected results for the twelve months ending December 31, 2017 and reflect management's current beliefs about product pricing, market size, market share, inventory levels, cost of sales, operating costs, taxes, and the anticipated timing of future product launches and events. Beginning in 2017, management is changing the method under which it calculates adjusted non-GAAP net income per diluted share to reflect the estimated tax impact of adjustments utilizing an estimated federal and state statutory rate, which is currently projected to be approximately 37%. Management believes that the new methodology will more appropriately reflect adjusted non-GAAP net income per diluted share as a performance measure. In addition, we will refer to this measure as adjusted non-GAAP diluted earnings per share on a go-forward basis. Table 3 provides a reconciliation of 2016 adjusted non-GAAP diluted earnings per share, calculated in accordance with the new methodology, to the most directly comparable US GAAP measure.

The following table shows 2017 guidance as compared with 2016 actual results.

Corticotropin Re-commercialization Update

Corticotropin API Manufacturing Update

In the 4th quarter of 2016, ANI's contract active pharmaceutical ingredient ("API") manufacturer has initiated the manufacturing of R&D development batches of Corticotropin API. Work has begun to re-establish each of the individual process steps necessary for the API manufacturing process. Immediately following the completion of these R&D development batches, work will then begin to scale up the API manufacturing process towards commercial scale manufacturing. ANI has initiated a search to identify a finished dosage form contract manufacturer for the Corticotropin drug product. Once identified, ANI will begin work to initiate Corticotropin finished dosage form product manufacturing.

Corticotropin Analytics Update

The ANI Corticotropin team has continued to make substantial progress towards developing approximately 20 different analytical methods. Some of these methods are being re-established from previously existing methods that were part of the monograph from the original API manufacturer, Diosynth. ANI recognizes that analytical technologies have improved over time, so included in the method development is a range of new, state of the art analytical methods that include molecular biological methods, such as SDS-PAGE electrophoresis, Western Blot, and ELISA, and instrumental methods, such as HPLC/UV and LC/MS/MS. Several of these methods will be used to prepare a comprehensive characterization package for ANI's newly manufactured Corticotropin API and other methods will be used to test and release new batches of API as they are manufactured. 

Corticotropin Project Team Update

ANI has continued to advance its Corticotropin project team, which now includes analytical expertise, API and drug product manufacturing expertise, and extensive experience with the development and manufacturing of animal-derived pharmaceutical products. The Corticotropin project team also includes resources with previous hands-on experience in manufacturing Corticotropin API at Diosynth, where it was previously manufactured in the Netherlands. ANI has recently hired Karen Quinn, Ph.D. to lead its Corticotropin Regulatory Affairs group, whose primary responsibility will be to lead ANI's regulatory strategy for Corticotropin with the FDA and subsequently file an sNDA to re-commercialize Corticotropin in the U.S. market.  

Fourth Quarter Results

For the three months ended December 31, 2016, ANI reported net revenues of $38.2 million, an increase of 112% from $18.0 million in the prior year period, due to the following factors:

• Revenues from sales of generic pharmaceuticals increased 109%, to $29.3 million from $14.0 million in the prior period, primarily due to sales of the ten generic products launched during the 2016 year.
• Revenues from sales of branded pharmaceuticals increased 179%, to $6.5 million from $2.3 million in the prior period, primarily due to sales of Inderal® LA, which was launched in Q2 2016.
• Contract manufacturing revenue increased by 19% to $1.6 million from $1.3 million in the prior year period, primarily as a result of the timing and volume of customer orders.
• Contract services and other income increased by 143%, to $0.8 million from $0.3 million, primarily due to a $0.6 million royalty payment related to a license for patent rights.

Operating expenses increased to $36.9 million for the three months ended December 31, 2016, from $11.8 million in the prior year period.

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