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Edited Transcript of ANIP earnings conference call or presentation 6-Nov-19 3:30pm GMT

Q3 2019 ANI Pharmaceuticals Inc Earnings Call

LINCOLNSHIRE Nov 22, 2019 (Thomson StreetEvents) -- Edited Transcript of ANI Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 6, 2019 at 3:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Arthur S. Przybyl

ANI Pharmaceuticals, Inc. - President, CEO & Director

* Stephen P. Carey

ANI Pharmaceuticals, Inc. - CFO & VP of Finance

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Conference Call Participants

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* Brandon Richard Folkes

Cantor Fitzgerald & Co., Research Division - Analyst

* Dana Carver Flanders

Guggenheim Securities, LLC, Research Division - Senior Analyst

* Elliot Henry Wilbur

Raymond James & Associates, Inc., Research Division - Senior Research Analyst

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Presentation

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Operator [1]

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Good morning, everyone, and welcome to the ANI's Third Quarter 2019 Earnings Call. (Operator Instructions). Please note, this call may be recorded. It is now my pleasure to turn this call over to today's program -- Mr. Arthur Przybyl. Please go ahead.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [2]

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Good morning, everyone. Welcome to ANI's earnings conference call for the third quarter 2019. My name is Art Przybyl, I am the CEO. And joining me today is Stephen Carey, our Chief Financial Officer.

Before we begin, I want to refer everyone to the forward-looking statements language in this morning's press release and ask each of you to review it carefully as important context for this conference call.

Discussions will also include certain financial measures that were not prepared in accordance with generally accepted accounting principles. Reconciliation of those non-GAAP financial measures can be found in our earnings release dated today.

ANI reported third quarter 2019 revenues of $51.3 million and adjusted non-GAAP EBITDA of $19.8 million. For the 9 months ended September 30, 2019, ANI reported revenues of $158.6 million, a 10% increase, and adjusted non-GAAP EBITDA of $65.8 million, a 6% increase. Our 9-month reported revenues and adjusted non-GAAP EBITDA are both record amounts for ANI.

Today, we provided revised 2019 net revenue guidance of $209 million to $212 million and adjusted non-GAAP EBITDA guidance of $84.7 million to $86.8 million, a direct result of additional competition and subsequent price erosion on several currently marketed generic products.

Over the last several years, we have from time to time, experienced generic price erosion from new competitors. Now, as in the past, we believe we can overcome these competitive challenges and continue to grow and advance our business model.

We remain committed to our core business model fundamentals. First and foremost, year-over-year growth in revenues and non-GAAP EBITDA. Since we became a public company in 2013, we have grown our annual revenues from $30.1 million and adjusted non-GAAP EBITDA from $7.5 million to today's numbers and have annually reported record revenues and adjusted non-GAAP EBITDA since 2013.

We expect to continue to expand, diversify and grow our generic revenues by launching additional generic drugs over the coming months. Importantly, we launched Vancomycin Oral Solution in the third quarter and recently announced our intended December launch of Bretylium Injection, both products that have the potential to be large generic revenue contributors for ANI. We expect to continue to grow our generic and mature brand revenues and EBITDA through accretive acquisitions.

Since 2014, we have acquired 124 generic drugs and 11 mature brands for a total consideration of $333 million in 18 different transactions. In the future, we expect to continue to invest our monies in these types of transactions.

Our continued advancement of Cortrophin Gel. We remain on track for our supplemental NDA filing in March 2020. From our paper to practice efforts, we recently dosed our first human volunteer subjects with our finished dosage form Cortrophin Gel drug. We continue to believe that Cortrophin Gel is a transformational revenue and EBITDA opportunity for ANI. Cortrophin Gel will compete in a monopolistic market that approximates $1 billion in net revenues today.

Second, a strong balance sheet and strong cash flow. Our current debt, net of cash, is approximately $130 million. At that debt level, we are levered at less than 1.5x the midpoint of our 2019 adjusted non-GAAP EBITDA guidance. Our cash flow from operations for the first 9 months of 2019 is $40.8 million, and our current cash on hand is over $64 million.

A large part of the generic industry turndown in recent years can be directly attributed to out of whack bloated debt loads on company's balance sheets. ANI remains steadfast in advancing our business model in a financially responsible manner. By doing so, it allows us to invest our monies in transactions that help us grow our business while not exceeding harmful debt levels. We are well prepared to meet any challenges our business model might face in the short term and have both short and long-term opportunities for continued growth.

We have near-term generic product launches, our Cortrophin Gel transformational opportunity and the financial firepower to continue to acquire accretive assets. We are excited about ANI's future. I will now turn the conference call over to our Chief Financial Officer, Stephen Carey, who will provide you with more details on our financial results.

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Stephen P. Carey, ANI Pharmaceuticals, Inc. - CFO & VP of Finance [3]

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Thank you, Art. Good morning to everyone on the line, and thank you for joining the call. While ANI's third quarter 2019 key financial metrics fell short of both internal and external expectations, our financial position and financial performance remain very strong. In fact, this is the 15th consecutive quarter that ANI has posted year-over-year top line sales growth.

As we will discuss, we have a diversified portfolio, a strong balance sheet position, an extremely solid track record of business development and remain on track to file the most promising drug in the company's history with the FDA. With this morning's announcement, we are resetting our guidance for 2019.

During the third quarter, we experienced competitive actions against our EEMT franchise and our EES franchise faces competition from 2 newly approved market entrants in the fourth quarter. These market realities have led us to recalibrate near-term expectations. As such, we are guiding to full year revenues of between $209 million to $212 million, reflecting fourth quarter revenues of between $50.4 million and $53.4 million. Full year non-GAAP adjusted EBITDA of between $84.7 million and $86.8 million, reflecting fourth quarter projections of $18.9 million to $21 million and full year non-GAAP adjusted earnings per diluted share of between $5.06 and $5.23.

These reductions occurred during a period in which we are building momentum behind our late September 2019 launch of Vancomycin Oral Solution. This product provides an FDA-approved alternative to a market that is largely served by compounding pharmacies. It is not a typical AB-rated generic launch. And therefore, we currently anticipate revenues to ramp over time as we build market awareness and product adoption.

In addition, we look forward to our upcoming December launch of Bretylium Tosylate Injection, our first marketed injectable product for use in emergency room settings. We currently anticipate that these products and other planned generic product launches will be meaningful growth drivers in 2020 and are examples of our increasingly diverse commercial product offerings.

In addition, we have a healthy balance sheet and strong cash flow that we intend to continue to leverage and support business development activities. During the third quarter of 2019, we generated $21.8 million of cash flow from operations, resulting in unrestricted cash and cash equivalents of $59.7 million as of September 30, 2019. This balance is reflective of $40.8 million of year-to-date cash flow from operations and is net of $21.2 million of cash utilized for business development activities and nearly $5 million of capital expenditures made during the first 9 months of the year. Total net debt as of the balance sheet date was reduced to $130 million, representing 1.5x net leverage on both a trailing 12-month basis and when utilizing the midpoint of our revised full year 2019 guidance.

As previously discussed, we remain on track to refinance the upcoming December 1 maturity of our $118.75 million convertible debt in the form of fully committed financing included in our $265 million senior secured credit facility. In addition, the $75 million revolver portion of this facility remains undrawn and coupled with our existing cash and cash flow from operations provides us with significant flexibility in continuing to pursue further business development transactions.

Turning to key P&L metrics. For the quarter ended September 30, ANI posted net revenue of $51.3 million, adjusted non-GAAP EBITDA of $19.8 million and adjusted non-GAAP EPS of $1.23 per diluted share. At $51.3 million, net revenue for the third quarter of 2019 was up $0.6 million or 1% versus prior year as gains in our generic and brand pharmaceutical product categories were tempered by declines in contract manufacturing and royalties.

Net revenue gains were driven by the late September launch of Vancomycin Oral Solution, higher sales volumes of both our brand Vancocin and generic Vancomycin tablets and higher sales volumes of Atacand and candesartan. These gains were tempered by decreased sales of the Arimidex, EEMT and Diphenoxylate-Atropine.

Cost of sales in the current year period was $15 million or 29% of net revenues as compared to $15.6 million or 31% of net revenues in the prior year period. The approximate 2-point year-over-year improvement in margin is principally due to lower royalty expense resulting from a royalty buyout completed in the first quarter of 2019.

Selling, general and administrative expenses were $14.4 million as compared to $11.8 million in the prior year, driven by a full quarter worth of cost related to ANI Canada, which was purchased in August of 2018, increased U.S.-based headcount and pharmacovigilance costs and continued support of the expansion of our portfolio, higher GDUFA and PDUFA user fees, higher legal fees and increased sales and marketing-related costs.

Research and development costs totaled $5 million in the quarter as compared to $4.7 million in the year ago period. Organic R&D spend continues to be driven by investment behind Cortrophin and work related to our underlying generic pipeline. Third quarter expense includes a $328,000 charge related to a milestone paid to a third-party development partner upon the FDA approval of the product in development. Typically, a payment of this nature would be capitalized to intangible assets. However, with current commercial forecast for this particular drug did not support capitalization, and therefore, we expensed the P&L as incurred. This item has been added back to our adjusted non-GAAP metrics for the quarter.

As Art mentioned, we continue to successfully complete key steps on our path to a March 2020 sNDA filing for Cortrophin. As part of our activities to date, the company has purchased and expended raw materials, active pharmaceutical ingredients and finished dose product in its R&D efforts. All of these costs -- excuse me, all cost related to this activity has been expensed as incurred to the P&L. However, starting in the third quarter, we began to purchase inventories that we currently expect will be utilized in salable commercial batches upon FDA approval of our prior approval supplement filing for this product. Ordinarily, materials purchased for commercial sale would be capitalized as inventory. However, since we are dealing with a novel product that must clear the supplemental NDA regulatory pathway with the FDA, GAAP dictates that such costs cannot be capitalized and must be expensed when purchased. In order to shed transparency on the physical build of Cortrophin inventory, starting with the third quarter, we have broken this activity out on a separate line item on the P&L and have disclosed further information in the footnote #14 to the financial statements.

Total expense for the third quarter was $195,000, which has been added back to our non-GAAP metrics. Most importantly, however, from an operational perspective, we are planning for success, and we anticipate our purchase of commercial levels of raw materials and API will significantly increase in the fourth quarter of 2019 and during the course of 2020.

On a GAAP basis, fully diluted earnings per share of $0.32 decreased $0.10 from the year ago period. Similar to the second quarter of this year, the calculation of our GAAP EPS includes the dilutive effect of our convertible debt, as GAAP requires that our diluted weighted average shares outstanding include the theoretical dilution that would occur at share prices above the $69.48 conversion price on the face of the convertible debt. The inclusion of these theoretical shares negatively impacted GAAP EPS by less than $0.01 in the quarter. Our adjusted non-GAAP diluted earnings per share excludes these and other impacts and was $1.23 per diluted share, down $0.06 or 5% from prior year.

As discussed on the second quarter call, from an economic perspective, our shareholders are protected from equity dilution up to a share price of $96.21 due to the hedging program that the company put in place in 2014. And as such, we currently anticipate no equity dilution associated with the December 1 maturity of our convertible notes. On a year-to-date basis, we have generated $158.6 million of net revenues, $65.8 million of adjusted non-GAAP EBITDA and $3.98 of adjusted non-GAAP diluted earnings per share, representing year-over-year gains of 10%, 6% and 6%, respectively.

In summary, while we acknowledge the revision to near term expectations, we remain steadfast in our confidence to weather normal course competitive pressures and to continue to leverage our portfolio, our balance sheet and the talent of our 300-plus colleagues to continue the long-term growth and success of ANI. I will now turn the call back to our President and CEO, Art Przybyl.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [4]

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Thank you, Steve. Nicole, we will now open the conference call to questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from the line of Dana Flanders with Guggenheim.

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Dana Carver Flanders, Guggenheim Securities, LLC, Research Division - Senior Analyst [2]

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I have 3 if that's okay. My first one is just -- can you maybe help us understand how we should think about generic gross margins trending into the back half of this year and into next year, given competition on some of your larger products? My second one is just on the durability of the portfolio in some of your top franchises. And I just ask because I believe EEMT is a desi product and Methazolamine (sic) [Methazolamide] has some API barriers. And so as we lap the impact of competition to some of these products, should we think about the risk of further competition is maybe not as severe? And then my third question, and I appreciate you haven't given 2020 guidance, but it sounded like you thought you had some nice pipeline opportunities to drive growth into next year. So curious if you could maybe just give us any initial thoughts on how we should think about top line growth in the generics business into next year, just given competition and what you have in the pipeline?

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [3]

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So, Dana, this is Art. I'll answer the last one first regarding 2020 guidance on some of our generic products. I'm going to actually punt on that question and -- not because I want to, but because I think Steve explained that a couple of the key products for us, Vancomycin Oral Solution and Bretylium as much as they represent potentially substantial revenue and margin opportunities, they are ramps. So unlike AB product that gets approved and you have a current market of $25 million and take some price erosion against that current market and say I'm going to capture 30% of that market, depending upon the level of competitors and sort of plug that in right away. You can't do that with these products. So these products are growing and will grow over time, obviously, with the Bretylium launch. And so we're going to -- I'm going take the opportunity to beg off on that question. And obviously, we'll be providing 2020 guidance for our generics and our entire business model in February at the fourth quarter earnings release.

Additionally, we never obviously anticipate the -- any transaction -- accretive transaction opportunities. There are several out there. We are certainly involved in them. Needless to say, we don't need transactions. It has to be the right value for us and, obviously, the right value for the seller. And so we would never put that into our guidance. But we certainly -- potentially anticipate that some of -- there could be some upcoming transactions that could be included in that guidance as well. So stay tuned for 2020.

In regards to the stability of our generic franchise, our EEMT product has always been relatively stable. The issue with that product is that there is a declining unit market and has been ever since we launched the product. But that desi is somewhat insulated from competition. In regards to Methazolamide, we have a nice exclusive relationship with an API manufacturer for that product that perhaps somewhat limits competition. I'm always leery about forecasting competition because if there -- we have found the generic market over time to be very efficient. If there are opportunities to drive revenues and gross profit to a business model in a product that has limited competition, frankly, we always feel that, that is going to be filled by companies that recognize those opportunities and final -- and is in subsequently launched products. And I think you've seen that in a couple of products this year alone, big products, methylphenidate, aspirin, dipyridamole, where significant competitive pressure came to the market, that didn't hurt us. We had not launched those products. And so maybe we didn't anticipate the amount of competition against what we forecasted for the product. But nevertheless, we were not someone who had to roll back their revenue base because of additional competition. Our generic portfolio pipeline has certainly grown over time. And yet, we've always experienced competitive pressures. I mean I can name products to you like Propafenone and propranolol that we acquired and launched, and they were great upon launch, and they've just rolled back over time. We haven't mentioned that, and this is the first time that we've kind of actually been caught in the middle of a quarter with some competitive launches. But we don't shy away from the EES, if you look at IMS data, it was a $28-million product. That's not net in revenues for us. But nevertheless, we know that we're going to lose, obviously, some of those revenues to -- because of price declines, ROFRs, that we have to address, right of first refusals with the 2 new product entrants. And so that's always married off by these additional product launches such as Bretylium and Vancomycin Oral Solution. I'm going to let Steve address the first question that you had, which was the durability of our gross margins on our generic products. Steve, would you take that question, please?

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Stephen P. Carey, ANI Pharmaceuticals, Inc. - CFO & VP of Finance [4]

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Sure. Dana, thanks for the questions. Yes, I think your question was specifically about the gross margin profile of the generic business. I don't think we've publicly commented on the breakdown of our margins, but I can speak of in the aggregate. So clearly, some of the pricing contraction will have a modest negative effect on the gross margin profile. But I think given the diversity of our portfolio and the numbers of products and with a few of the launches that we've been speaking of, we're talking about very modest numbers somewhere in, I don't know, directionally, 2 to 3 points on the margin line, something in that range.

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Operator [5]

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Your next question is from the line of Elliot Wilbur with Raymond James.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [6]

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Art, can you just talk a little bit about sort of capital deployment strategy. Obviously, the company has done quite a few transactions over the years, and there's a lot of assets that are emerging for sale or remain for sale. But just from your perspective, where do you see the best relative values if you think about the 3 different buckets that you've transacted at in the past, branded assets, generic products or -- and portfolios or potentially even manufacturing or dosage-form platforms?

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [7]

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Sure. So we continue to pursue mature brands. If you look at our mature brand -- and why do we do that? I mean typically, you've seen us buy those at, I think, relatively good reasonable value-add in multiples. We've been successful, as you know, many times launching AGs against some of those mature brands and putting together some programs that maybe stabilize the decline in mature brands in terms of market units as they -- as it happens over time. But if you look at our mature brand portfolio, it's certainly grown over the years. And it's -- I would say, it's not an annuity, but it's certainly more so of an annuity than the cliff that you can experience sometimes amongst your generic products. So for us, mature brands has always represented cash flow and diversification away from risk associated with our generic product portfolio, okay? And we've always -- we've taken the same path in our generic product portfolio. Like many other generic companies, a small percentage of your generic products drives a large percentage of your revenues in your portfolio. And that's just a function, step function of competition. We continue to pursue accretive generic transactions as well. We have to be careful with those types of transactions. And they have to have a crystal ball approach to what can happen to some of those products. As you know, many of the generic products that we have acquired have been discontinued. And we've always sort of pluck the nuggets out of those acquired product portfolios, advanced them to the marketplace and done very, very well. I mean, yes, regardless of the fact that competition has hit that market, it's been a great product for us for 3 years running. And that's the nature of generics, take your profits while you can, competition is coming and make sure that you have a backstop for it with additional product launches. So we will continue to pursue generic products. We're a believer that the generic industry needs to be rolled up. There's a lot of walking dead out there. And there certainly is a number of assets that are for sale. When there's blood in the streets, buy property. And we have the cash flow to do it and the firepower to do it. And frankly, we see that we believe that sometimes we are the only strategic bidder for some of these assets. But nevertheless, we have to actually represent good value for us and obviously a good purchase price for the seller. So there's that, that is added into the equation for some of these transactions. But we also see ourselves potentially with continued diversification into other finished dosage forms of generics besides what we currently have, which is all solids and liquids. And I think that's important. It's important that our entire generic portfolio is not beholden to 3 consortiums that drive 90% market share in the United States for generic pharmaceuticals. And by that, I mean, it's important that we diversify into other dosage forms that perhaps are driven -- these contracts or revenues are driven through, for instance, hospital group purchasing organizations. That represents additional diversification. So all of this comes with that in mind that portfolio diversification is important, launching as many products in any given year is important, but it's always finding those products that are driving revenues and margins for us, not just for not launching. We don't want to be advancing products that are below a certain threshold of gross profit for us. Simple as that. In terms of looking at additional manufacturing capabilities, Canada for us is currently representative of taking some of the workload off of broad debt. And so it also diversifies risk in terms of compliance, et cetera. Our facilities are pristine in terms of the VAI status and comply, I don't want to give anybody the wrong impression. But it certainly adds another element of capacity for additional product launches and maybe we can do more product launches in a given year rather than less because we've added additional capacity. At the same time, we are slowly advancing our CDMO business. And that, again, would provide us with additional diversification. Right now, it's very tiny. Our CDMO business is less than 10% of our overall revenue base. But we expect that to grow over time. And so you've seen us launch ANI Global Source, which admittedly is a website intended to hopefully drive some virtual companies to take a look at us and see if they'd like to do business with us. We make -- I think, we are not the lowest cost manufacturer. We certainly make a quality product, on-time delivery and service, et cetera. And so we're excited about that opportunity. And that's why we've unveiled that website and the fact that we are advancing that through booth, obviously at CPhI. So we're just getting started in that arena. And again, that provides us with what we'd like to say is the beginnings of additional diversification into CDMO businesses and, again, taking -- limiting risk to any one particular business platform that we have at the company.

And so I hope that answers your question. We certainly -- we have lots of cash and availability of credit to apply for additional transactions. This has admittedly been a lean year for transactions for the company, but we expect that pace to certainly pick up and resemble prior years going forward in the future.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [8]

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Okay. And then I want to ask you a question around Cortrophin Gel as well. Upon submission of the application in March and assuming that FDA does what it's supposed to do, and you were the recipient of a positive review and approval within the statutory timeline, how quickly do you think you could actually go-to-market in terms of actual product sales, if in fact, you were to receive an approval, I guess, would be in the...

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [9]

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If we received approval after a 4-month PDUFA date, we would launch on 1 day after the approval. We would launch the next step. We'll be ready to launch. So when Steve talks about the inventory, the fact that we're starting to build inventories, you're going to see over the course of next year and beginning in the fourth quarter -- well, beginning in the third quarter, but in the fourth quarter, substantial inventory builds, which will be associated with stockpiling of, we'll call it the gross raw material to pituitaries stockpiling active pharmaceutical ingredient and beginning to actually have finished dosage-form inventory on hand, ready to sell on the day of approval or the day after approval.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [10]

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Okay. And as part of the application review process, are you anticipating actual inspections of both the API facility and the finished dosage-form plant? I can't remember if we've discussed this previously.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [11]

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Okay. Yes, we are. We make the assumption that as part of the supplemental review that both our API and finished dosage-form drug manufacturers will be inspected.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [12]

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Okay. And just one last question on the recent announcement around the Bretylium opportunity, I think you've characterized that around -- market size around 360,000 files, but given that the product hasn't been on the market for a very long time, I have no idea sort of what price point for that asset could be. You haven't launched it yet, so I'm assuming you don't want to say a whole lot, but just given that I would assume it would be a premium product to what's currently being used, which I think is injectable lidocaine. But just any color you could share maybe outside of just the volume commentary around that product would be helpful.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [13]

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Well, I agree with you. We see the launch of the product as premium product, understanding the effect of product launches like this, in fact, many of them have to go through P&T committees in a hospital setting, but understanding that this is a drug that can be -- 2 of these vials can be placed on, for sake of argument, every crash cart out there. I think Rob talked about -- we've talked about a number of 180,000 crash carts and 2 per crash cart. But yes, we would -- we will weigh all of that as we're pricing the product, but since we would be the only one on the market, yes, we would view this as premium pricing within the confines of wanting this to not be -- have any effect on a decision associated with repurchasing this for crash carts as it -- with that decision going through P&T committees.

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Operator [14]

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And the final question will come from the line of Brandon Folkes with Cantor Fitzgerald.

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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [15]

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So you talked about launching Cortrophin on day 1 post-approval, but correct me if I'm wrong here. So given that it's an sNDA, it's obviously not going to be substitutable for Acthar. So can you just help us think about your go-to-market strategy on day 1 to get prescribers writing your product? And then any comment you may be willing to give around the potential for your competitor to bring in an auto-injector of the Cortrophin product?

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [16]

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So let's answer the first question. It's a bit premature to speak to our go-to-market strategies. I'll give you some macro thoughts that I've always expressed. And yes, the product -- you're right, the product is not -- we'll potentially have or have more than those same label indications as the competitive product. So first and foremost, we will give at some point in time a much more detailed, deeper dive into our go-to-market strategy for Cortrophin. I could tell you that part of that go-to-market strategy will begin, in earnest, well in advance of the anticipated FDA approval for the product. And I will continue to reiterate from my perspective that a product like this, a specialty pharmacy-distributed-driven product through a small group of prescribing physicians and obviously, the payers that are supporting this, we remain firmly in the camp that market share units and revenues will be driven, first and foremost, as most drug products are driven today that are not monopolistic, that economics will rule the day. And we continue to believe that, okay? So there'll be more to come on our go-to-market strategy with Cortrophin. And the second part of your question, Brandon, I'm sorry, was...

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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [17]

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Any thoughts on the competitor to talk about bringing auto-injector.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [18]

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The auto-injector, I'm sorry. So look, the auto-injector, I suspect that they could potentially launch an auto-injector, okay? And I think our competitor is talking about that. I guess you have to ask yourself how much an auto-injector delivery system will drive or maintain market share for a drug that's selling for, I believe, over $50,000 a vial in the face of what potentially could be a 30% to 50% discount to that price. And I'll let you answer that question. And again, I think it falls back on, economics rules the day.

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Operator [19]

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We have no further audio questions.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - President, CEO & Director [20]

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Okay. Then I'd like to thank everybody for attending ANI's third quarter earnings conference call today. Have a great afternoon. Bye-bye.

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Operator [21]

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This concludes ANI's Third Quarter 2019 Earnings Call. You may now disconnect your lines at this time, and have a wonderful day.