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DATE

Friday, May 8, 2026, 8 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Nikhil Lalwani
• Senior Vice President and Chief Financial Officer — Stephen Carey
• Senior Vice President and Head of Rare Disease Business — Christopher Mutz

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TAKEAWAYS

• Total Net Revenue -- $237.5 million, representing 20% growth year over year, driven by Rare Disease, Generics, and out-licensing agreement contributions.
• Cortrophin Gel Net Revenue -- $75.1 million, increasing by 42% year over year, and consistent with prior expectations.
• ILUVIEN Net Revenue -- $19.3 million with 20% year-over-year growth attributed to ongoing commercial and access initiatives.
• Generics Net Revenue -- $105.4 million, up 7% year over year, reflecting continued strength from partnered generic launches and new products.
• Adjusted Non-GAAP EBITDA -- $63 million, a 24% increase from the prior-year period.
• Adjusted Non-GAAP Diluted EPS -- $2.05, versus $1.70 in the previous year’s quarter.
• Non-GAAP Cost of Sales -- $93.1 million, rising 28% due to increased royalty-bearing product sales and higher volumes.
• Non-GAAP Gross Margin -- 60.8%, decreasing 230 basis points, primarily due to higher royalty-bearing sales and product mix changes.
• Non-GAAP R&D Expense -- $10 million, flat year over year.
• Non-GAAP SG&A Expense -- $71.4 million, up 12%, mainly for Cortrophin commercial expansion costs and business support.
• Cash and Cash Equivalents -- $311.2 million as of quarter-end, up $25.6 million sequentially.
• Cash Flow from Operations -- $58.4 million generated in the quarter.
• Outstanding Debt -- $625 million in principal as of March 31, 2026.
• Gross and Net Leverage -- Gross leverage at 2.6x and net leverage at 1.3x trailing 12-month adjusted non-GAAP EBITDA.
• 2026 Net Revenue Guidance -- Raised to $1.08 billion to $1.14 billion (up $25 million from previous guidance).
• Cortrophin Gel 2026 Revenue Guidance -- Reaffirmed at $540 million to $575 million.
• ILUVIEN 2026 Revenue Guidance -- Maintained at $78 million to $83 million.
• 2026 Adjusted Non-GAAP EBITDA Guidance -- Raised to $285 million to $300 million (up $10 million from prior guidance).
• 2026 Adjusted Non-GAAP EPS Guidance -- Now $9.19 to $9.69 per share.
• 2026 Adjusted Gross Margin Guidance -- 59.9% to 60.9%, raised 60 basis points from previous outlook.
• Shares Outstanding for 2026 EPS -- Assumed at 21.5 million to 21.8 million; full-year effective tax rate of 26%-28%.
• Harmony Biosciences Out-Licensing -- $15 million upfront license fee received, with a potential $10 million milestone anticipated in Q2 and Q3, and low single-digit royalties on pitolisant products.
• Share Repurchase Authorization -- New $100 million, 3-year program approved, with no ASR anticipated currently.
• Cortrophin Gel Growth Drivers -- 18% of use attributed to acute gouty arthritis flares; organizational expansion targeting 7,000 new HCPs underway, completion expected by end of June.
• New Generics Product Launches -- 6 new generics introduced year-to-date, maintaining the #2 industry position in CGT approvals.
• April Cortrophin Metrics -- Highest number of new patient starts and monthly dispensed volume registered since launch.

SUMMARY

ANI Pharmaceuticals (ANIP 2.22%) delivered 20% total net revenue growth and 24% adjusted EBITDA growth, supported by double-digit gains in both Rare Disease and Generics. The quarter saw the receipt of upfront licensing revenue from Harmony Biosciences (NASDAQ:HRMY), with additional milestone and royalty income expected from pitolisant development. Management raised full-year revenue and EBITDA guidance, reflecting improved visibility into Generics launches and milestone timing, and introduced a $100 million stock repurchase program to complement business development strategies. ANI Pharmaceuticals reaffirmed strong expectations for Cortrophin Gel, with accelerated momentum and commercial expansion targeting significant unmet opportunities in acute gouty arthritis flares. Non-GAAP gross margin narrowed by 230 basis points, reflecting higher royalties and product mix, while robust cash flow and a $311.2 million cash balance provided flexibility for future capital allocation.

• Cortrophin Gel revenue growth is primarily attributed to expansion within core specialty indications, with the majority of gains still not dependent on new prescriber groups.
• Rare Disease revenues are anticipated to approach 60% of corporate total in 2026, as the Generics and Brands segments continue to supply cash flows for reinvestment.
• The ACTH market opportunity remains underpenetrated, and the dedicated commercial build-out targets 285,000 U.S. patients with acute gout, supporting sustained medium-term growth.
• ILUVIEN sales initiatives remain focused on improving clinical data dissemination and addressing persistent Medicare market access challenges; minimal sequential revenue growth is forecasted for the product in 2026.
• Commercial pilots in primary care and podiatry have informed a 64-person sales force expansion, aimed at accelerating uptake in new physician segments during the back half of the year.

INDUSTRY GLOSSARY

• CGT approvals: Refers to U.S. FDA approvals for complex generics, generic controlled substances, and niche therapies, relevant for measuring share in the generic pharmaceutical industry.
• ACTH therapies: Adrenocorticotropic hormone-based treatments used for inflammatory and autoimmune conditions, including acute gouty arthritis flares.
• NIU-PS: Noninfectious uveitis affecting the posterior segment of the eye, a specific indication for certain ophthalmic drugs.
• DME: Diabetic macular edema, an eye condition targeted by retina pharmaceuticals like ILUVIEN.
• HCPs: Health care providers, specifically physicians targeted for new product education and adoption.

Full Conference Call Transcript

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.

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?

Christopher Mutz: 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.

Stephen Carey: 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.

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

David Amsellem: 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?

Nikhil Lalwani: 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.

Operator: Our next question comes from Vamil Divan with Guggenheim Partners.

Vamil Divan: 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?

Nikhil Lalwani: 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.

Operator: Our next question comes from Dennis Ding with Jefferies.

Yuchen Ding: 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?

Nikhil Lalwani: 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.

Operator: Our next question comes from Glen Santangelo with Barclays.

Glen Santangelo: 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.

Nikhil Lalwani: 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.

Glen Santangelo: 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.

Nikhil Lalwani: 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.

Operator: Our next question comes from Ekaterina Knyazkova with JPMorgan.

Ekaterina Knyazkova: 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.

Christopher Mutz: 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.

Operator: Our next question comes from Leszek Sulewski with Truist.

Leszek Sulewski: 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?

Nikhil Lalwani: 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.

Stephen Carey: 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...

Leszek Sulewski: Harmony.

Stephen Carey: 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.

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

Brandon Folkes: 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.

Nikhil Lalwani: 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.

Operator: Our next question comes from Thomas Smith with Leerink Partners.

Thomas Smith: 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?

Nikhil Lalwani: 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.

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