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Edited Transcript of ANIP earnings conference call or presentation 6-Nov-18 3:30pm GMT

Q3 2018 ANI Pharmaceuticals Inc Earnings Call

LINCOLNSHIRE Nov 18, 2018 (Thomson StreetEvents) -- Edited Transcript of ANI Pharmaceuticals Inc earnings conference call or presentation Tuesday, November 6, 2018 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. - CEO, President & 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

* Dewey Steadman

Canaccord Genuity Limited, Research Division - Senior Specialty Pharma 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 ANI's Third Quarter 2018 earnings call. (Operator Instructions) Please note, this call may be recorded, and it is now my pleasure to turn the program over to Mr. Arthur Przybyl. Please go ahead.

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

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Good morning, everyone. Welcome to ANI's Earnings Conference Call for the third quarter 2018. My name is Art Przybyl, I'm the CEO, and joining me today is Steve 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 to this conference call.

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

Today, we reported our third quarter results. Record net revenues of $50.7 million, adjusted non-GAAP EBITDA of $21.4 million and adjusted non-GAAP diluted earnings per share of $1.29. Based on these results, we reaffirmed our guidance for 2018.

Our 9-month results generated record revenues of $114.5 million, record adjusted non-GAAP EBITDA of $62.2 million and record adjusted non-GAAP diluted earnings per share of $3.74. Increases of 11%, 14% and 32%, respectively, as compared to the prior year 9-month period.

Throughout the third quarter, we continued to successfully execute on our strategy to expand and grow our generic brand and contract manufacturing business platforms. Our generic drug portfolio continued to grow with the launch of 3 new products: Cholestyramine, and authorized generics of Brethine and Atacand HCT. Year-to-date, we have now launched 7 generic products, increasing our total generic drug portfolio to 31 products. Our key generic pipeline products, methylphenidate extended-release tablets, aspirin dipyridamole extended-release capsules and our undisclosed priority of new product continue to track to their announced launch dates. These 3 generic products are substantial 2019 revenue and gross profit opportunities for ANI. Methylphenidate extended-release tablets will be the biggest product launch in ANI's history. Recently, we increased our brand drug portfolio in ANI label to a total of 11 products with the October 1 launch of Atacand and Atacand HCT.

In September, we filed our prior approval supplement with the FDA for Vancocin Oral Solution, and our work continues to progress on recommercializing Cortrophin and filing the supplemental NDA in the first quarter of 2020.

In August, ANI acquired WellSpring Pharma Services to expand our contract manufacturing and development business. We are currently integrating that business and look forward to making further use of the manufacturing facility to advance work on our pipeline products.

As a result of these events, 2018 product launches, 2019 forecast of product launches, and our forecasted first quarter 2020 Cortrophin FDA filing and the expanded investment in our contract manufacturing business, we are excited about our prospects for continued revenue and EBITDA growth in 2019 and beyond. We remain very bullish on our business model.

With that, I will now turn the conference call over to our Chief Financial Officer, Steve 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 to discuss ANI's third quarter 2018 financial results.

For the 3 months ended September 30, 2018, ANI posted net revenues of $50.7 million, adjusted non-GAAP EBITDA of $21.4 million and adjusted non-GAAP EPS of $1.29 per diluted share. This performance yields a new high watermark for quarterly revenues and represents the first time that quarterly net revenues rose above $50 million for the company.

It has been an extremely active period for ANI as we work to integrate our first company-level acquisition. As previously announced, on August 6, we acquired 100% of the outstanding equity of WellSpring Pharma Services, a Canadian company that performs contract development and manufacturing of pharmaceutical products. The transaction was structured as a cash-free, debt-free deal with the preliminary purchase price for accounting purposes of $17.3 million.

From an operational perspective, we are in the initial phases of integrating ANI Pharmaceuticals Canada and our approximately 100 Canadian colleagues into ANI. With a focus on operational excellence, strengthening of existing CMO relationships, sourcing of new CMO opportunities and seeding ANI pipeline projects into the Oakville Ontario plant. For the period of August 6 through September 30, the Canadian operations contributed $1.7 million of revenue and a GAAP net loss of approximately $170,000.

From an accounting perspective, we completed the initial purchase price allocation and day 1 accounting for the transaction. The deal has been accounted for as a business combination under the provisions of ASC 805. Of the $17.3 million purchase price, approximately $14 million has been allocated to property, plant and equipment; $1 million to working capital; and the resultant $2.3 million of goodwill. To date, we have incurred approximately $1.3 million of transaction- and integration-related costs, inclusive of legal advisers, accounting and tax services, certain employee-related costs and deal-related insurance.

Turning back to quarterly results. Net revenue for the 3 months ended September 30, 2018, was $50.7 million, up $2.5 million or 5% versus prior year as declines in our generic and branded products were more than offset by revenue from royalties. Revenues of our generic pharmaceutical products declined a modest 1% from prior year to $30.3 million, driven by declines in lower margin products such as fenofibrate and lower sales of the EEMT and Nilutamide. These declines were tempered by the favorable impact of Ezetimibe-Simvastatin, which was acquired in May of this year. Branded pharmaceutical revenues were $14.6 million in the quarter, a decrease of 7%. Prior year comparisons are primarily due to a decrease in unit sales and average price of Inderal LA and volume declines for Vancocin, tempered by higher sales of InnoPran XL and Inderal XL, coupled with the launch of Arimidex and Casodex in the ANI label in July of this year.

Royalty and other income was $3 million for the quarter, driven by approximately $2.1 million related to our profit from the sales of Atacand and Atacand HCT, as well as approximately $500,000 related to certain third quarter milestones and sales of Gilead's Yescarta. This line also benefited by $500,000 of product development and laboratory work performed by ANI Canada for third-party customers. In addition, revenues for our contract manufacturing services were $2.8 million, up 55% or nearly $1 million, principally due to results of ANI Canada.

Cost of sales in the current period was $15.6 million or 31% of net revenues and included a modest $44,000 of spec-up costs related to our WellSpring transaction. Prior year cost of sales included $2.8 million of costs recorded due to the stack up of phases for finished goods inventory, purchased in conjunction with certain acquisitions. Excluding this amount, prior year cost of sales was $18.3 million or 38% of net revenues. This 7-point, year-over-year improvement is directly attributable to the impact of higher royalty income, which has no corresponding cost of sales and decreased sales of products subject to profit sharing arrangements.

On a GAAP basis, selling, general and administrative expenses were $11.8 million as compared to $8 million in the prior year, driven by approximately $1.3 million of underlying ANI Canadian SG&A cost, $900,000 of transaction and integration cost and incremental employment costs to support the growth of our U.S. business.

Research and development costs totaled $4.7 million in the quarter, up $2 million or 77% from prior year. This increase was driven by investment behind our Cortrophin recommercialization program and work related to our underlying generic pipeline, including new projects acquired in our second quarter 2018 purchase from Amneal.

Our effective tax rate for the quarter was 20.9% of pretax income as compared to 25.9% in the prior year period, primarily due to the favorable impact of the federal corporate statutory income tax rate of 21% as established in the Tax Cuts and Jobs Act of 2017. This rate benefited both our GAAP and adjusted non-GAAP diluted earnings per share metrics in the quarter.

From a balance sheet perspective, we had unrestricted cash and cash equivalents of nearly $44.1 million as of September 30, 2018. This balance is reflective of $8.3 million of cash flow from operations during the quarter and is net of the $17 million that we invested behind the acquisition of WellSpring Pharma Services in August.

On a year-to-date basis, we have generated $39.8 million of cash flow from operations while investing $27 million back to the business through our acquisition of WellSpring, purchase of generic, commercial and pipeline opportunities from Amneal and IDT; and capital expenditures to enhance the capabilities of our manufacturing facilities.

Total net debt as of the balance sheet date approximated $171 million, representing 2x net leverage on both the trailing 12-month and forward-looking basis, when utilizing the midpoint of our full year 2018 guidance. The $50 million revolver portion of our senior secured credit facility remains undrawn, and coupled with our cash flow from operations, continues to provide us with flexibility in pursuing further business development transactions.

On a year-to-date basis, we have generated $144.5 million of net revenue, $62.2 million of adjusted non-GAAP EBITDA and $3.74 of adjusted non-GAAP diluted earnings per share, representing year-over-year gains of 11%, 14% and 32%, respectively.

As Art previously mentioned, all 3 of these metrics represent new records for the company. With 3 quarters of 2018 behind us, we are reiterating our full year 2018 guidance as updated during our second quarter earnings call.

We anticipate that our fourth quarter performance will be driven by: further leveraging the July launch of Arimidex and Casodex in the ANI label; the October launch of Atacand and Atacand HCT in the ANI label; continued execution in maximizing the potential of our recently acquired and launched generic product, including our recent terbutaline launch; and successful integration of ANI Pharmaceuticals Canada.

In conclusion, we are increasingly optimistic about the future of ANI. We look forward to delivering significant value to our stakeholders through continued maximization of exciting generic pipeline opportunities, leveraging the capabilities of our newest colleagues at ANI Pharmaceuticals Canada; driving the recommercialization of Cortrophin; and continuing to deploy capital in a judicious manner. With this, I will return the call back to our President and CEO, Art Przybyl.

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

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

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Brandon Folkes with Cantor Fitzgerald.

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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [2]

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Firstly, you presented a really good EPS number this quarter. But you left the guidance unchanged. So it leaves quite a wide range on the EPS line for 4Q. Could you just talk us through some of the pushes and pulls around EPS in the fourth quarter? And then I'll ask my follow-up after that.

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

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Steve, you want to take that question?

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

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Sure. Good morning Brandon, and nice to speak to you. So I think we're confident with 9 months behind us that the full year ranges remain intact. And so, thus, we've reiterated earnings this morning. Clearly, this has been a year where ANI has performed, I think, in a macro background that's been difficult within the space. And so we're confident that the fourth quarter will deliver within the range of the remaining guidance. And the pushes and pulls, really, are as I laid out a moment ago, really continuing to maximize our current generic portfolio and the generics that were acquired in the Impax/Amneal divestiture, which remains a very important transaction for the company. And also, bringing in the AstraZeneca brands that were acquired at the very tail end of 2017 and brought into ANI in January of 2018. As you know, in the beginning of the year, those product sales were represented in our royalty line. We had now brought all 4 of those products as of the beginning of October, brought all 4 of those products into the ANI label. And those have -- had been second half catalysts for us. And then lastly of course, early days of the integration of ANI pharmaceuticals Canada. But as we operationalize that business, that would be in the bucket of a push and pull for the fourth quarter.

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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [5]

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And then just following on from that. Can you perhaps talk us through the ClarusONE agreement? And how long it may take you to reach sort of a long-term run rate there in terms of volume? And then secondly, you mentioned R&D spending on your generics pipeline. Does that insinuate we could see additional products disclosed beyond what we had already disclosed for 2019 and beyond?

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [6]

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So Brandon, the latter part of your question. Yes, you should expect to see additional generic products launched. We typically don't disclose our product launches for generic products for competitive reasons. We have obviously -- because of the Impax transaction, and in fact, that the public announcement associated with that. It certainly made sense for us to disclose the methylphenidate ER and aspirin/dipyridamole product, which you note that, that one is launching date certain October 1, and we've guided to obviously the first quarter for methylphenidate ER. But you should expect to see cadence of additional generic product launches from our pipeline of 75 products over the course of 2019. We just don't disclose those as a matter of course. And so we -- and if I may just ask you the first part of your question again was?

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Brandon Richard Folkes, Cantor Fitzgerald & Co., Research Division - Analyst [7]

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Could you help us think through the volume increases that ClarusONE made and the timing?

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [8]

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Oh, right, right, right. There is no -- yes, so with ClarusONE, we already have products on agreement, okay? We don't have a -- we don't have internally a number that we hope to achieve in terms of revenue run rates through ClarusONE. We don't look at consortium agreements in that manner. We tend to -- for instance, we'll take methylphenidate ER, we have a model, obviously for that product and target gross profit that we think we can achieve. Now how we achieve that is going to be based on the contracts. Obviously, the pricing, the volumes. And so -- but look at the product in an aggregate basis, okay? Not we want to do this and that with ClarusONE, this amount with Red Oak, this amount with WBAD. We don't look at it quite that way. So ClarusONE will grow over time as we add additional products to the agreement. And that is based on product launches that we present to them. They certainly do occasionally request for proposals, RFPs, test the market on certain products and pricing. But that's how we view it as a company. We never look at it as what our target revenues are through 1 particular consortium. We look at it for the entire market place and how that's divvied up is based on what contracts we win with each specific consortium. I hope that answers your question.

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Operator [9]

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Your next question comes 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 [10]

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First question for Art. Maybe just get to some general commentary from you in terms of the current deal environment. Obviously, it seems like an acceleration transaction from larger entities looking to regrow their businesses, both brand and generic assets coming to market at pretty cheap multiples. So I'm just wondering sort of, from your perspective, what are you seeing in terms of deal activity. Where you think the best opportunities are? And how do you think about allocation of capital over the next 12 to 18 months with respect to the sort of 3 buckets: brands, generics and then, maybe even thinking about development platforms?

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

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Right. So good question, Elliot. As you know, we have, sake of argument, approximately $100 million to put to work. And that's based on today's numbers. Obviously, our free cash flow continues to increase. So there are certainly targets that we have. If we felt that there was a center for excellence, there's something that could give us in a, more of an internal product development ANDA approach, we would certainly consider that through acquisition. But it is difficult sometimes to put a value on a future generic product launches that are coming off a patent because you just sometimes have a tough time anticipating the amount of competitors for that particular ANDA approval and how many people are chasing the same bucket of dollars. So -- but that doesn't mean that we don't continue to look for that internal platform through acquisition if it made sense. I would say to you that the environment for generics and we'll call it, as you know, we buy mature brands is primarily heavily skewed towards generics right now. There are a number of generic businesses or product opportunities that we see available to us within the amount of cash flow and cash we have to spend. So we have certainly a focused attention on that. You might see additional partnership agreements for ANDA-type products, with generic products. We like the partnership model, maybe more than just the acquisitive model for some of those -- for some generic products. And brands pop up from time to time. So there's no -- I can't give you a set number. But clearly, because of the upheaval within the U.S. generic markets, they are without question, there are a significant amount of transaction opportunities that maybe we can avail ourselves of. And so we'll see. We'll see what the -- we never know, obviously going into a new year, what might transpire any more than we did this year. But you've seen us pull down several deals this year. You know that we've continued to be acquisitive, and put our money to work in that fashion. And we think that's our best use of capital, as well as obviously investing internally in R&D.

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

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I just want to ask a couple of follow-up financial questions for Steve as well. Specifically thinking about gross margin level. Obviously, strong performance this quarter. And if I look at sort of the revenue mix and levels, very similar to what was reported in the second half of '17, but gross margin, 600 to 700 basis points above those levels. So maybe just give, maybe a little bit more color, insight into sort of what drove the relatively strong gross margin performance even though it looks like mix and levels were fairly similar.

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Stephen P. Carey, ANI Pharmaceuticals, Inc. - CFO & VP of Finance [13]

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Sure, sure.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [14]

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Before you answer that, Steve, I just want to point out one thing, Elliot, that I think is very important, okay? And this is on obviously, gross margin levels, percentages are important to us but not as important as aggregate gross profit dollars. And so when I speak about the fact that methylphenidate is going to represent the largest potential product launch in the company's history, there are very few generic products where there's 3 or 4 competitors that have an $800 million to $900 million gross profit -- sales opportunity, and an aggregate market opportunity of $1.3 billion. Now -- but be aware that, with that particular product, we are going to be more interested in gross profit dollars than in the gross profit percentage. It's going to be less than our current percentage that's in the 60s. I just want you to be aware of that. But for us, it's always about the generation of gross profit dollars and cash flow that matters. But Steve, if you'll take that, if you'll the rest of that question in regards to the fourth quarter and obviously, where our margins are today, I'd appreciate that.

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Stephen P. Carey, ANI Pharmaceuticals, Inc. - CFO & VP of Finance [15]

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Sure thing. Yes, and good morning Elliot. Yes, so the biggest item is, I think within 2 things, within the mix of generic products. There has been an improvement in margin. And that would be driven by the fact that one of our -- probably our biggest headwind within the generic portfolio this year has been on the fenofibrate product. And so recall that, that is an authorized generic type distribution agreement. And so we have corresponding, say just the distributors' margin on that product, and so, while that has been a fairly significant headwind on the revenue line this year, the pull-through on that product is relatively small. So net-net, I think improvement in the gross profit of -- within the generic portfolio. And then coupled with the strong performance on the royalty line, right? And so dissecting that royalty line, there's really 2 items going on there. One is during the first 6 months of the year, 100% of our gross margin from the 4 AstraZeneca products was coming through the royalty line. In the third quarter, we pulled in Arimidex, Casodex into the sales and cost of goods sold line for ANI. But the 2 Atacand products remained in royalties. And that will go away in the fourth quarter. So all others things being equal, we would expect royalties to decline in the fourth quarter. But the other important component of that revenue -- royalty revenue line is the royalty that would be seen on Gilead's Yescarta product, and we would, hope of course that, that part of the line will continue to grow. Not only next quarter but in future years as Gilead builds out that franchise. But those are the biggest factors in the gross margin performance this quarter.

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Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [16]

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Okay. And then I guess more specifically, I want to ask about, you issued at, sort rose of last quarter with respect to a much higher, next to the 340B business in the June period and just sort of how that transpired this quarter, whether or not it was the same, bill it as mix, or if you saw it return to more normalized levels?

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Stephen P. Carey, ANI Pharmaceuticals, Inc. - CFO & VP of Finance [17]

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Sure. Yes, sure. Yes, so, big picture, it came in as expected, right? So as we discussed in the second quarter earnings call, one of the company reset guidance, largely on the performance of that 1 product, Inderal LA. We did set the anticipated mix to historical levels. And that mix came through as expected in the third quarter. And so, versus our revised expectations, I would say right in line. Still on a year-over-year basis, it's a negative comp and that's why we cited that product, both on average price and volume in terms of our expectation for the product going forward. It came in as expected.

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Operator [18]

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Your next question comes from the line of Dewey Steadman with Canaccord Genuity.

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Dewey Steadman, Canaccord Genuity Limited, Research Division - Senior Specialty Pharma Analyst [19]

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About the recently acquired product from the Astra portfolio. Third-party data, it indicates meaningful increases for Casodex and Arimidex that corresponds roughly with the label switch-over. Should we expect a similar increase on the Atacand portfolio, which just switched over? And how much of that increase are you actually realizing as net pricing? And then how should we approach the EES and EEMT markets going forward? Just any kind of thoughts on additional competitors or even on improved product potentially entering on EEMT.

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

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Well, let's take the latter part of that first, EEMT. Currently it's a 2-player market. We have been in that market where it's been 3 players in the past, Dewey. And this might have been before you covered us, I can't remember. I'm sure we always are on the lookout for another player, obviously. But we feel pretty good about our position on that product associated with consortium agreements that we -- that drive our market share on that product. That product, if you know though, year-over-year declines in terms of overall use and units sales. And so we expect that same, we always factor in or forecast in that same level of decline year-over-year on that product. In regards to EES. We've actually have seen record sales of units in September. That product, that continues to grow. It's not to say that again, there won't be another competitor. As you know, we busted the monopoly on that particular product. It's a nice product for us. It's an old line antibiotic. There'll be some additional updates associated with that product in our Q that's being released after hours today, so you can certainly -- I would advise you to read the narrative section on that product later on today. And so hopefully, it gives a little bit of color on EEMT, EES. And the other part of your question, Dewey? One more time.

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Dewey Steadman, Canaccord Genuity Limited, Research Division - Senior Specialty Pharma Analyst [21]

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The pricing for Casodex and Arimidex --

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [22]

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Oh, right, right, right. But Dewey, we expect to see -- so when it comes to -- so when we change a brand over to our label, we certainly get, what I would say is, for sake of argument, 20 to 30 day stocking orders, okay, from the wholesalers to effectuate that brand-level increase. But that, that, if the product doesn't sell, and it certainly does, but if it didn't sell, then we wouldn't see subsequent orders in follow-on months. I suspect -- I don't know what the overall unit increases were with Arimidex and Casodex associated with the switch over to the ANI label. So I can't tell you, off the top of my head, let me look it up for you, talk you later, Dewey, whether they'll say it, we already anticipate the same level of unit increases with Atacand and Atacand HCT, so...

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Dewey Steadman, Canaccord Genuity Limited, Research Division - Senior Specialty Pharma Analyst [23]

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What kind -- it wasn't unit increases, it was pricing. So revenue divided by, your gross revenue divided by number of units going out. So we got a movement of pricing, gross pricing.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [24]

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Right, right, right. I mean, we still expect to be able to generate the same level of sales that the product was currently doing under the AstraZeneca labels. And perhaps we can give you a little bit more color on that when we have -- when we talk with Steve later on in the afternoon, if that's okay.

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Dewey Steadman, Canaccord Genuity Limited, Research Division - Senior Specialty Pharma Analyst [25]

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All right. And then on Cortrophin and there -- are there any more FDA interactions that are mandated before filing...

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [26]

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No, there are not. I will tell you, Dewey that -- sorry to interrupt you. Cortrophin, we are past the development. We are into commercial scale production. Our specs versus the old specs, the modernized specs on this. We look good. We are very bullish in this product. We are certainly on track to file. When we mentioned in the first quarter, we're putting the product up on stability prior to filing next year. And we are very excited about the opportunity for that product that we think that, again, we are very bullish on that product at this particular point in time. And the most important thing is, it's difficult for us to -- obviously, you had not seen us put out a filing date for a long time, because we really had to get through the science and the development of it first. The modernization of it, the comparison back to previous level, our conversations with the FDA, as you know. At this point in time, we're full speed ahead. And we don't see any showstoppers to filing that SNDA on the time frame that we mentioned. So you just have to stay tuned. But it was a big project and our team has done a great job of taking, let's say from paper, 30 years ago, to putting it into a finished dosage form file. And so we're excited. We're excited about the opportunity to break that monopoly as well.

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Operator [27]

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And at this time, there are no further questions. I will turn it back over to management.

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Arthur S. Przybyl, ANI Pharmaceuticals, Inc. - CEO, President & Director [28]

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Well, I'd like to thank everybody for attending our conference call today. We reiterate the fact that we remain very bullish on our business model, now and going into 2019. We have a lot of shots on goal. And we look forward to reporting our results to you next quarter and providing you 2019 guidance, which will be part of the end of the year 2018 earnings release. Thank you very much. Have a nice day. Bye-bye.

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Operator [29]

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Thank you. This concludes ANI's Third Quarter 2018 Earnings Call. You may now disconnect your lines at this time, and have a wonderful day.