Q1 2023 ADMA Biologics Inc Earnings Call

Participants

Adam S. Grossman; Co-Founder, President, CEO & Director; ADMA Biologics, Inc.

Brian Lenz; Executive VP, CFO & GM of ADMA BioCenters; ADMA Biologics, Inc.

Skyler Bloom; Senior Director of Business Development & Corporate Strategy; ADMA Biologics, Inc.

Anthony Charles Petrone; MD & Senior Medical Devices, Diagnostics and Therapeutics Equity Research Analyst; Mizuho Securities USA LLC, Research Division

Elliot Henry Wilbur; Research Analyst; CIMB Research

Kristen Brianne Kluska; Analyst; Cantor Fitzgerald & Co., Research Division

Presentation

Operator

Good afternoon, and welcome to the ADMA Biologics First Quarter 2023 Financial Results and Corporate Update Conference Call on Wednesday, May 10, 2023. (Operator Instructions)
Please be advised that, this call is being recorded at the company's request and will be available on the company's website approximately 2 hours following the end of the call.
At this time, I would like to introduce Skyler Bloom, Senior Director, Business Development and Corporate Strategy at ADMA Biologics. Please go ahead.

Skyler Bloom

Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics' financial results for the first quarter 2023 and recent corporate updates. I'm joined today by Adam Grossman, President and Chief Executive Officer; and Brian Lenz, Executive Vice President, Chief Financial Officer and General Manager of ADMA BioCenters.
During today's call, Adam will provide some introductory comments and provide an update on corporate progress, and then Brian will provide an overview of the company's first quarter 2023 financial results. Finally, Adam will then provide some brief summary remarks before opening the call up for your questions.
Earlier today, we issued a press release detailing the first quarter 2023 financial results and summarizing certain achievements in recent corporate updates. This release is available on our website at www.admabiologics.com.
Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represent the company's intentions, expectations or beliefs concerning future events, which constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
All forward-looking statements are subject to factors, risks and uncertainties such as those detailed in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update any such statements, except as required by the federal securities laws.
We refer you to the disclosures notice section in our earnings release we issued today in the Risk Factors section of our 2022 annual report on Form 10-K for the year ended December 31, 2022 and our quarterly report on Form 10-Q for the quarter ended March 31, 2023 for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements.
Please note that, today's discussion includes certain non-GAAP financial measures, including adjusted EBITDA. A reconciliation of non-GAAP financial measures to the nearest comparable GAAP metric is available in our earnings release.
With that said, I would like to now turn the call over to Adam Grossman. Adam, go ahead.

Adam S. Grossman

Thank you, Skyler. During the first quarter of 2023, ADMA generated first-time adjusted EBITDA profitability, totaling $2.5 million. This milestone achievement was enabled by an impressive 96% year-over-year increase in total revenues, which reached $57 million in the first quarter. The robust revenue growth translated to meaningful operating leverage, which was a result of continued gross profit growth and disciplined management of our operating expenditures.
Based on these trends, we have increased our 2023 total revenue guidance, now expected to exceed $220 million. And we anticipate continuing to grow adjusted EBITDA from the newly established baseline throughout the remainder of 2023. Although, it's still early for our forecasted revenue growth and profitability cycle, we believe ADMA is now entering a new echelon alongside some of our high-quality industry peers
Based on the year-to-date financial results and considering our newly increased financial guidance, ADMA is among only a few standalone biopharma companies in the United States that are expected to generate total revenues of more than $220 million for the full year of 2023, while maintaining a substantial revenue growth rate and also generating continued adjusted EBITDA profitability.
We are proud to now be included in this exclusive set of high-quality biopharma companies. Within the $10 billion plasma space specifically, ADMA advanced its position as the fastest-growing provider of immune globulin in the United States market, which we attribute to our organization's exclusive focus on the immune deficient patient segment, the immune globulin market's fastest growing cohort.
During the first quarter, we treated a record number of patients and gained strong market share among what we anticipate will prove to be sticky books of business. We believe our innovative business model, unique immune globulin portfolio, and targeted medical education efforts position us well for future success.
We believe the milestones, we've achieved to date validate our core mission to commercialize novel products for immune-compromised patients at risk of infection. It is treating this underserved patient population that fuels our organization and drives our company's unified commitment to overachieve and deliver on our operational and financial objectives.
Over the past 2 years, we've communicated an unwavering message about our favorably evolving product mix, and we're happy to confirm that these trends are continuing to strengthen in 2023. ASCENIV growth continues to be driven by its uniqueness amongst immune globulin product offerings and the real world impact and improvements the drug is having on outcomes for problematic immune deficient patients.
Furthermore, we're seeing encouraging signs of patient and prescriber persistence among those who have been using the drug for as long as three years now. This dynamic is being compounded by record expansion of new accounts and reorder velocity among existing customers. We believe that, the product will continue to account for a greater share of our overall product mix going forward.
We are pleased to announce that during the first quarter and into the second, ADMA made progress advancing its recently identified growth opportunities. To reiterate, the incremental investment required to pursue these opportunities is not significant and is not expected to compromise ADMA's robust profitability outlook.
First among these opportunities, ADMA successfully commenced manufacturing of the ASCENIV at the 4,400 liter production scale for the first time in our corporate history. We expect the expansion will meaningfully improve the product's margin profile and increase our plant production capacity as fewer batches will be needed to support our revenue goals.
The expanded scale provides for uninterrupted production to support our forecasted rapid growth trajectory. We believe these benefits could be realized as early as the second half of 2023.
The second growth opportunity we've identified pertains to yield enhancement with our manufacturing and production processes. Recently, the company progressed with development scale and laboratory analysis, advancing ADMA's initiative to capture additional immunoglobulin production yields. Pending further evaluation, validation of commercial scale production, and ultimately regulatory approvals, these yield enhancement initiatives could meaningfully increase both peak revenues as well as margin potential if successful.
Finally, our ongoing post-marketing clinical studies progressed as planned during the quarter and if successful may provide for label expansion opportunities for both BIVIGAM and ASCENIV to include pediatric-aged primary humoral immunodeficiency patients, as well as additional publications supporting the product safety. The potential label expansion, we believe, would put ADMA's immune globulin portfolio on a level playing field compared to peer immunoglobulin offerings. Again, these opportunities represent potential upside to currently provided financial guidance. We look forward to updating the market as developments unfold.
On the plasma supply front, our strong RSV hyperimmune plasma and normal source plasma inventories, presently on hand, are expected to support all upwardly revised revenue forecasts for our immune globulin portfolio. We believe that the rapid expansion of our internal collection network, coupled with our existing contractually secured third-party supply contracts, provide financial and supply chain flexibility. Currently, all 10 plasma collection centers in our network are operational, and of those, 8 are now FDA licensed. We continue to anticipate achieving complete FDA licensure of our BioCenters network, as well as plasma supply self-sufficiency prior to year-end 2023.
In a moment, Brian will describe in more detail the credit agreement we announced last week. But from my perspective, we are pleased to have reduced our interest expense by 1%, and we believe the restructuring of the prepayment mechanism provides for additional strategic and financial flexibility.
Considered in conjunction with the increased operating forecast we have announced today, we believe an opportunity exists to accelerate net income profitability earlier than previously provided in our timelines. Sincerely appreciate Hayfin's continued and collaborative support.
Our employees' commitment, passion, and diligence drive our success. We've prioritized the human connection in all engagements through cooperation and teamwork among staff, leadership, and our advisors. Our team's unwavering connectivity has enabled us to assume complete end-to-end control of operations, fulfilling our core vision and providing the foundation for continued success moving forward.
We thank our staff for rising to the challenge daily, delivering on our pledge to patients, the medical community, prescribers, advocacy groups, and our stockholders. Your efforts make a meaningful difference in the lives of those counting on us.
Before turning the call over to Brian, I'd like to confirm that our strategic alternatives process remains ongoing and exploring value-creating opportunities remains a top priority for our company. The strategic alternatives process is separate and running in parallel to our pursuit of new growth opportunities. As developments occur, we will keep the market updated.
With that said, I'd now like to turn the call over to Brian for a review of our first quarter 2023 financials.

Brian Lenz

Thank you, Adam. We issued a press release earlier today outlining our first quarter 2023 results, and we will be issuing our first quarter 10-Q later this evening, which we would encourage you to read in conjunction with our comments and discussion points we will make during today's call.
I'll now discuss some of the key highlights from the quarter. As Adam mentioned earlier, total revenues for the 3 months ended March 31, 2023 were approximately $56.9 million, as compared to $29.1 million during the 3 months ended March 31, 2022. And this represents an increase of $27.8 million, or approximately 96%. The increase is attributed to higher sales of our immune globulin products, driven by increased physician, payer, and patient acceptance and utilization, as well as the expansion of our customer base.
During the quarter, we also benefited from an increase of $4 million in sales of normal source plasma through our ADMA BioCenter segment, as we fulfilled our long-term plasma supply commitment for 2023 with our third-party customer. Throughout the remainder of 2023, we anticipate using all of the plasma collected from our BioCenters network to support our IVIG production operations.
Our gross profit for the first quarter of 2023 was $16.5 million. This translates into a 29% gross margin, as compared to $3.7 million, or a 12% gross margin for the same period of a year ago. This gross profit improvement of approximately $13 million was primarily driven by the revenue increases and the reduction in other manufacturing costs related to an extended otherwise-routine plant shutdown in the first quarter of 2022. Partially offsetting the favorably evolving product mix, ADMA sold the substantial majority of the remaining lower margin 2,200-liter scale BIVIGAM product during the first quarter of 2023.
As we move forward, production throughput and sales recognition is anticipated to be substantially confined to the higher margin 4,400-liter BIVIGAM product along with ASCENIV. Our consolidated net loss for the quarter ended March 31, 2023 was $6.8 million, compared to $25 million for the first quarter of 2022. The $18.2 million decrease in net loss was mainly due to the narrowed operating loss of $14 million period-over-period, and the loss on extinguishment of debt of $6.7 million we recorded in the first quarter of 2022. This is in connection with the refinancing of our senior secured credit facility, partially offset by the increase in interest expense.
Our adjusted EBITDA increased by $14.2 million for the 3 months ended March 31, 2023, as compared to an adjusted EBITDA loss of $11.7 million for the same period of a year ago. The adjusted EBITDA improvement was driven primarily by increased sales, improved gross profit, and lower total operating losses.
As Adam indicated, the recent credit amendment with Hayfin provides for multiple favorable changes. First, there's the reduction of 1% in the nominal interest expense on ADMA's current note. This will result in a lowered borrowing rate of SOFR plus 8.5%. Included in this base rate and consistent with the existing terms of the Hayfin facility, the company may elect to pay up to 2.5% of the interest in kind with the remaining portion of the interest payable in cash.
Second, within the first 24 months after the amendment closing date, among other provisions, there is a newly structured 50% waiver of the prepayment fee in connection with an acquisition of the company or other certain strategic transactions. Taken together, we believe these changes will reduce ADMA's cost of capital and provide for added financial flexibility over the near term and on an ongoing basis.
In addition to the further enhancements of the capital structure, ADMA's balance sheet remains strong. At March 31, 2023, ADMA had working capital of $227.4 million, primarily consisting of $164 million of inventory, cash and cash equivalents of $69.2 million, and $26.5 million of accounts receivable. This was partially offset by current liabilities of $36.7 million, all compared to a working capital balance at December 31, 2022 of $231.1 million.
Lastly, our ADMA BioCenters plasma collection network now consists of 8 FDA licensed collection centers with 2 additional centers operational and collecting plasma, which are pending FDA licensure. The company remains on track to have the remaining 2 BioCenters FDA licensed by the end of 2023, and in the same period, forecast raw material plasma supply self-sufficiency from all 10 centers.
Now, well into 2023, we are encouraged by the real-time improvements in donor foot traffic and collection volumes, which are now considerably exceeding our organization's pre-pandemic levels.
With that, I'll now turn the call back over to Adam for closing remarks.

Adam S. Grossman

Thank you, Brian. As demonstrated over the last 2 years, we take a conservative approach to guidance construction, contemplating a range of both macro and company specific variables.
That being said, today we are pleased to be increasing total revenue guidance, which is now expected to exceed $220 million. Further, we anticipate continued adjusted EBITDA growth from the newly established first quarter base.
Growth and business trends are strengthening and the forward-looking visibility required to meet or exceed our financial targets is as clear as ever. We believe our investments in the supply chain and commercial infrastructure in recent years have created a solid foundation for maintaining best-in-class revenue growth and potentially achieving an ultimate margin profile at the upper bound among plasma product manufacturing peers.
Additionally, we've taken a thoughtful approach to pursuing new growth opportunities. We continue to progress with these projects which we believe have the potential to yield further upside to what we already anticipate will be a highly profitable growth cycle over the near and longer-term. We look forward to building on the momentum of early 2023 to drive further success.
In closing, I'd like to thank you, our stockholders, for your continued support as your investment in ADMA helps to advance our mission to save lives and make high-quality, safe, and efficacious products that help our friends, family, and neighbors. Please donate plasma and help save lives
With that, we'll now open up the call for your questions. Thanks, everyone. Thank you, operator.

Question and Answer Session

Operator

Thank you. Today's question-and-answer session will be conducted electronically. (Operator Instructions) Our first question comes from the line of Elliot Wilbur of Raymond James.

Elliot Henry Wilbur

I just wanted to extend my congratulations to management and the entire organization on all your accomplishments of the past couple of years. It's been a terrific journey and certainly I've enjoyed being able to observe it from my analyst seat.

Adam S. Grossman

Thank you, Elliot, very much.

Elliot Henry Wilbur

And obviously, congratulations on the achievement of first-time positive EBITDA. I know there's been a lot of blood sweat, maybe even a few tears invested behind that over the years, but obviously a significant milestone for the company.

Adam S. Grossman

You're not supposed to talk about that, Elliot.

Elliot Henry Wilbur

First question has to do with revenue trends over the balance of the year and just looking at the overperformance in the first quarter and then sort of taking literally the low end of your guidance, which would be $220 million. That would imply the possibility of a sequential step-down at some point over the next 3 quarters. Markets obviously have become accustomed to sequential positive top-line growth over the past couple of years, but just wanted to get your thoughts around the likelihood or whether or not there's something more definitive that would, in fact, we'd actually see revenue step down over 1 of the next 3 quarters before resuming growth.

Adam S. Grossman

Sure. Great question. And, you know, Elliot, we're always conservative in our guidance, but we continue to reiterate that we anticipate quarter-over-quarter growth.
Certainly in the first quarter of this year, we had outsized plasma revenues from our plasma collection business. These plasma revenues will not recur going forward, but I'll tell you that the demand that we're seeing for ASCENIV and BIVIGAM, the demand that we're seeing for our intermediate fractions and even NABI, we are very, very bullish on the continued top-line growth, as well as trends for continued EBITDA and potentially even bringing profitability a little bit earlier than anticipated.
So, we really are confident here. In the prepared remarks, you heard me say a couple of times that, it's still early in the growth trajectory for ASCENIV, and we do feel that the way that the product is being received, the way that we're seeing patients getting added to the program, we think that the growth is only going to continue.
So, we feel very strong about our prospects financially going forward. The first quarter had some headwinds still. The revenues consist of some of the lower margin BIVIGAM that we've been talking about over the last few quarters. We've exhausted most of that inventory. So we really feel very good about the forward-looking prospects of enhancing EBITDA, getting to net income profitability, possibly a little bit earlier, but ultimately top-line.
Are the beats going to be as big as they've been? I don't know. Is the quarter-over-quarter growth going to be as big? I don't know, but we are committing to quarter-over-quarter revenue growth, and my hope is that it continues. I mean, the staff is working. Our company has never been more unified. The staff is working extremely well from what we do here in Boca, from making the product all the way through to our commercial folks. Plasma collection trends look great. I mean, everything is really falling into place right now, and we feel really strongly that this is only the beginning, and it's going to continue.

Elliot Henry Wilbur

And then I have a follow-up question for Brian as well, and this touches on an issue we discussed at length last quarter, and that's with respect to the reduction in plasma center operating expenses, fairly significant sequential step-down. I assume that's not an actual reduction in cost, but just an allocation to or capitalizing of those expenses versus running them through the P&L, but is the number this quarter indicative of a new floor, and will cost basically remain at these levels going forward? Just trying to get a better sense of the trend in that number. And there's a corollary to that. One of the larger fractionators that reported results yesterday highlighted multiple times in its conference call, a significant reduction in its COGS specifically tied to rather sharp reductions in the cost of collection. They talked about 25% to 30% decline in the cost of collections as being a key factor resulting in their improved margins, and I'm wondering if you're seeing a similar trend in terms of the actual collection cost.

Brian Lenz

Sure. Very good observation regarding the plasma center costs, and as they continue to progress throughout the year -- as we continue to progress throughout the year, we think these costs as you see in the first quarter are going to remain very stable. The step down that we saw first quarter '22 to first quarter '23 really is predominantly made up of the -- we have more centers in production now. More centers are now have entered into maturity phase of collections. For instance, this time last year in first quarter '22, we had 7 centers collecting and open, and now we have 10.
All 10 of our centers are open and collecting plasma.
We had 5 centers in the first quarter of '22 that were FDA approved, and now we have 8. So, again, the majority of our centers are now more in that maturity phase. They're collecting plasma in greater numbers than they certainly were in the first quarter of 2022.
So we would expect that the number for the first quarter of '23, the $1.8 billion to, I would say, remain fairly constant throughout the rest of the year, because we are able to capitalize more of those costs to inventory and then being charged the cost of sales against revenues.
Regarding the some of the commentary on plasma collection fees and overall costs, we don't comment on other competitors and what they say in the market. What we do see is we do see some donor fees in certain areas decreasing. We see certain programs that were in place a year or 2 years ago as we've exited the COVID pandemic that have wound down, that's because of certain special government programs, stimulus programs, and so forth. So some of those incentives to donors have sunset, if you will, and we are -- we certainly want to remain competitive as a collector, but it's not just about the donor fees.
We're really proud of our centers. We get very good comments back from our donors that our centers are very professional. They're clean. They're welcoming, and it's about also the experience. So again, as Adam said, we're very proud of the organization as a whole, especially our plasma collection centers and how well-maintained and how professional we treat and treat our donors.

Elliot Henry Wilbur

And final question for Adam. In just thinking about the incremental opportunity in the pediatric population, my assumptions are that the pediatric pin population is about 10% to 15% of the total, and I'm wondering if that's consistent with the company's thinking. And then just looking at some of the timelines associated with the ongoing studies, it looks like the BIVIGAM study may have been completed already. And I'm wondering if that information has been submitted to FDA as of yet, and I'm assuming that ASCENIV would still be on track to have the actual data submitted to FDA by the end of the year. I want to confirm that.
And then I'm wondering, is there a case to be made for higher relative utilization of ASCENIV in the pediatric population than what you're currently seeing across the current patient base, either just based on higher comorbidities, such as asthma and ear infections, or because there's just a naturally higher rate of IVIG non-responders in the pediatric population?

Adam S. Grossman

Sure. So, I don't think the 10-Q has been filed yet, but I remember us editing the section. Yes, the BIVIGAM study is fully enrolled and is completed. I believe that we're working through the data set, and that'll be submitted imminently
to the FDA.
ASCENIV study is ongoing and enrolling, and we're going to be asking for an extension to keep that study open for a period of time, and we'll update the market in the Q as that
progresses.
Regarding the pediatric indication, I've talked about this before on calls. I know people out there are going to go back and look at what I said historically, so I don't want to misspeak, but we don't view the pediatric indication as something that we absolutely need in order to grow this product. It'll put us on a level playing field with other immune globulin offerings in the United States, both from a SubQ and an IV standpoint. It's a legal requirement that the FDA has that manufacturers complete pediatric obligations and pediatric studies.
ASCENIV, I don't want to misspeak, but I think we have age 12 up to 65. BIVIGAM, we didn't run that study that we inherited that product, and we acquired the assets back in June of '17. That product, I want to say, is '18 and up, but we're not looking at it as it's really going to expand the market. I mean, 4% ASCENIV specifically, as you were asking, it's for problematic primary immune-deficient patients, full stop for patients that are not thriving on their existing IG. It's for patients that have chronic and persistent infections, be it young or old. Problems don't discriminate whether you're a child or whether you're an adult with PI.
I don't have the data in front of me on the spread, but I'm going to go out there and say that the majority of utilization with ASCENIV is currently on label. It's in patients that have had PI for a while, that have experienced multiple IGs over the course of their treatment journey. They've changed brands. They've had dose escalations. They've been on antibiotics for multiple months and years at a time. They've been on Tamiflu multiple months and years at a time. And it's a product that really the real-world evidence is demonstrating that it's doing something unique and different out there.
So, we feel good about the product. We feel good about how it's differentiated in the market and that it's the only product that's manufactured by blending RSV plasma and normal source plasma. And just to circle back to your question, the pediatric indication is something that we believe that we should obtain, but it should not impact our ability to grow revenue for BIVIGAM or ASCENIV into the future. Hopefully, that answers your question.

Operator

Our next question comes from the line of Anthony Petrone of Mizuho Securities USA.

Anthony Charles Petrone

Thanks, and congratulations again here on another strong quarter, strong start to the year 2023. Maybe, Adam, to start, we can talk a little bit just about hyperimmunoglobulin specifically. Certainly, there's momentum in ASCENIV here. Your prepared remarks point towards stickiness, but also continued new patient volumes for ASCENIV. And then your competitor and supplier, Grifols also reported a very strong hyperimmunoglobulin number for their quarter in 1Q of '23. So maybe just to level set us a little bit here on the state of hyperimmunoglobulins?
And then specific to ADMA, just the tailwinds we're seeing in ASCENIV. How sustainable is the momentum in new patient starts? And over time, how sticky can this prove to be on those patients as we continue to move ahead here? And then I'll have a couple of follow-ups.

Adam S. Grossman

Thanks for the great question. What I'll say is that you mentioned Grifols, we're in completely different spaces. I mean, I think the majority of their hyperimmunes are derived from their rabies product. We don't compete in that space. They also have tetanus and Rho(D) immune-globulin. They compete more with CSL and some other companies there. So it's a completely different space.
But I think to your point, the utilization of hyperimmunoglobulin is something that is very sticky in general. And it is very standardized.
With Accentive, I mean, look, we've been saying it for well over a year.
We've been saying that the patients who are leaving their normal IGs, their standard IGs
and being placed on ASCENIV, I mean, look, we've been saying it for well over a year. We've been saying that the patients who are leaving their normal IGs, their standard IGs and being placed on ASCENIV. We continue to see persistence in the ordering and utilization trends.
I mean, I think that that's recognized by the quarter-over-quarter growth and the fact that, we are a couple of calendar quarters earlier than we anticipated from an EBITDA perspective. I think it speaks volumes to the fact that the utilization of ASCENIV is growing and the demand is growing. So we've got good -- we know what our distributors are buying.
I always find it and I always make this comment too, and some of my staff and my kids at home always say, I have tomorrow's newspaper today. I know what I'm selling already in the second quarter. And we -- I would not be reiterating like I did with Elliot's question that I feel confident about quarter-over-quarter growth, if I didn't feel that utilization was sticky.
The patients are doing well on drugs, Anthony. I think that we've all learned a lot. I think, again, I haven't said this in a while, and I don't really want to bring up COVID, but I really think that, in patient mind and in physician mind that, we all understand that more antibodies are better than less when trying to treat or prevent an infection. I think the only way that immune-compromised patients get antibodies is through immune globulin replacement therapy.
And we're the only product that screens their donors. And, again, it's not an RSV drug.
We just use RSV as a marker to identify who the hyperimmune donors are. And then as we've published, these donors have high titers to a panel of different respiratory viral pathogens. And the scientific thought process is that these donors could theoretically have higher titers to other viral and bacterial pathogens.
So that's why the patients are doing well. And the doctors keep reordering, the payers keep paying, and our distributors keep reordering, paying their invoices, and stocking products. So the product is pulling through faster than ever. I always get a little nervous, and I think I mentioned this last quarter. I always get a little nervous at the calendar flip. When people are changing insurance or insurance plans are changing, CMS rules changing all the time. But we really have had very little attrition. And I think that whoever the payers are and the doctors are, they're seeing that these patients are doing well. They're not being hospitalized. They don't have the same opportunistic infections and the continued persistent infections. They're thriving.
And we've got some marketing campaigns that we've been routing through our promotional review committee here internally. And maybe this is a little granular for folks, but we're going to be rolling out some patient testimonial ads. We're working on expanding that because of the product. It's still a new product, but it's not that new. And we've got patients who've been on therapy for multiple years now who are willing to put their name on the line and say, hey, I want to tell my story. So I don't know what is better. What's a better reward than that? And you have people who have said that, I was not doing well and doctors thought that this was a good product or I did my research and I learned about it. I asked my doctor and I've been feeling great on this. So I feel it's sticky. Our commercial team tells me, Adam, don't worry, we got this. I'm committing to quarter over quarter growth. I feel good about this, Anthony. I really, really do.

Anthony Charles Petrone

That's great. And obviously evident in the results here. Maybe, Adam, a couple quarters now you're talking about newly identified growth initiatives the company's pursuing. And I want to zone in on the yield enhancement initiative. Maybe just if you can to give us a little bit behind the scenes there. Maybe where is the bulk of facility today in terms of yield when we think of grams per liter? Where can that go over time? And maybe what's the path forward? I mean, how much testing has to be done and what type of regulatory pathway do you need to pursue?

Adam S. Grossman

All great questions, we truly are excited. These new growth opportunities I feel are just transformative for the business. You didn't mention it, but I'm super happy about it because ASCENIV with the 4,400 liter scale, it's something I said I would never do, but I'm eating my hat and we're doing it and we successfully made a couple of batches so far. And I'm really excited about that because what it does is it allows us to put more plasma through the plant. It allows us to absorb more of the “unabsorbed” manufacturing overhead. We think margins for ASCENIV could creep.
We've always said, it's 80%-ish gross margin product. Maybe it creeps into the upper 80s, maybe low 90s. We still have yet to see, but it's really exciting and it's going to allow us to put more product through the plant, ultimately lowering COGS and absorbing some of that manufacturing overhead.
With respect to the yield enhancement, this is truly transformative. I don't want to get ahead of myself. I don't want to get over my skis. The data that has been shared with me has looked very favorable. For those who understand plasma fractionation, there is loss inherent in the cone ethanol alcohol fractionation process that we employ here at ADMA. For yield, I've always said, historically, roughly 3.8 to 4.1 grams per liter. In that range, historically, some of our competitors who use filter presses get a little more yield. I like using our centrifuges. I feel that, there is something to be said with respect to treating the protein very gently, but that's a scientific conversation for another day. What I can say, Anthony, is that we anticipate yield's meaningful improvements.
I'm not yet prepared to completely quantify it, but let's just say that if it would transform our business, I don't think it's unreasonable to expect that the profitability targets that we're laying out there, which currently do not contemplate the yield enhancement or really 4,400 incentive product in there, should continue to expand going forward. You asked a question about regulatory process. You asked a question about timelines. First, I'll comment that the actual spend to do this work -- I don't want to say it's not material, but it's not material. I was looking at the numbers today with Brian. He was preparing me for this. We've got a lot of assets. I think it's over $300 million worth of asset value here. The $2 million, $3 million we're going to spend on this, it's really not that much considering where we've come from and where we're going.
Timelines, I mean it's -- again, a lot of it comes down to what happens with the bench scale. What I can tell you is that the team is very excited about this. We've got our small scale model working 24 hours a day around the clock. We're pushing this forward. We're having conversations about the regulatory path and the regulatory strategy.
Quite frankly, it's a comparability protocol. It's something that ADMA has been successful with. Anthony, I know you've followed the company for a while. Elliot, you've been following the company for a while. Kristen, you've been following the company not as long. I'll just say that when we took this facility over and we optimized, I think that was the term we used, the manufacturing process, it was a very similar process to what we think we're going to have to employ here.
We're going to have to make some conformance batches. We're going to have to put them on stability. We're going to submit to the FDA, and the FDA is going to have a PIS to review. I don't think this is anything that's scary. It certainly doesn't scare me at this stage. We've been successful doing this multiple times. I think as we progress, I don't want to scare my process development team who's probably listening to this call, because a lot of the staff listens to the call, but let's just say that they are truly dedicated to this. Our hope is to get this done as rapidly as possible because, look, the company is transforming in general.
We're selling more incentive. We're selling all the business we can make. We're finding cost efficiencies across the organization. I reiterate that the company is totally unified behind this. We are motivated by the benefits that we're providing out there to immuno compromised patients. We're actually at the end of the tunnel. Where we are EBITDA positive now, we think that that's going to continue, and we want to get there as fast as possible. I'm not really totally prepared to give guidance on the timelines, but we're working as fast as we can. I think our investors and I think our analysts know us by now that we are truly dedicated. We are conservative in our guidance, both financially as well as our regulatory timeline. So give us a little bit more time, but we assure you it will be exciting and I believe will be successful.
And I think that, it's only going to reap more benefits for us as we grow into the future. For those long-term holders, I mean, that forward-looking guidance that we continue to reiterate, roughly $250,000 top line next year, $300,000 in 2025, we think it only grows. Ultimately, when you're making more product from the same, to use Skyler's term, when you're getting more juice for the same squeeze, sorry to do that to you, but you do say that. Our margins are going to improve. And I think this is ultimately what everyone's been saying to us is, Adam, you've got to get margins better. Adam, you've got to get this better. I think this all plays well. Just to tie it in as we're moving forward, I think people start to pay attention. Anthony, we're moving into a different echelon of company. I said it in a prepared remark. There's very few companies out there that are under a few billion of market cap that are doing over $220 million a year in revenue that are positive EBITDA that are forecasting continued top line and EBITDA growth. That is ADMA Biologics. I mean, we're no longer - I mean, I do not think we are a sleepy company anymore. I think we are a company that is here to play. We are moving into a different category. Hopefully, the market cap reflects that as the trading day starts tomorrow. But I can tell you that, the yield enhancement strategy is only going to make us stronger.

Anthony Charles Petrone

With that, I'll hop back in queue. As I say, you guys have arrived. Again, congratulations on the quarter. We'll talk soon.

Adam S. Grossman

We have a lot more to do, Anthony. We're not there yet. The team knows it. We are not stopping here. We have a lot more growth. I want that net income. When we hit net income, I told [Scott] I would not say this, but I am upset that the Rangers lost. But -- only then will I be able to die in peace when we have net income profitability. So I want to get there fast. But thank you. Thank you for the kind words.

Anthony Charles Petrone

Congrats, again.

Operator

Our next question comes from the line of Kristen Kluska of Cantor Fitzgerald.

Kristen Brianne Kluska

Let me also add my congratulations to you on another great quarter and the pattern that we've really seen emerge over the last couple quarters here. So I wanted to ask you a bit more on incentive utilization. If I look at some of your publications, posters, et cetera, it really seems that the benefits are quite broad. I mean the age of the patients, the underlying comorbidities, the time to treatment, it seems pretty diverse amongst the patients yet the benefits are all there.
So curious if real-time you're seeing that the effects represent a broad patient population or if there's a specific type that you've seen and then can you talk about some of your plans maybe the next 12 months to collect and report on more of these case studies?

Adam S. Grossman

Sure, great question. Thank you for the kind words Kristen, always appreciate it. It's -- I don't want to sound like a broken record but, but you kind of answered your own question with the question. It is a diverse population. I mean, look, PIDD comes in all shapes and sizes. Immune deficient patients, primary and secondary, that's where we're focusing our marketing efforts.
We focus exclusively on that patient population and we're targeting infectious disease conferences, we're targeting immunology clinical immunology conferences and you know these patients come in all shapes and sizes and they all have a different -- it sounds corny, but this is the way that the marketing team has ingrained it in my head. Everyone has their own treatment journey, so these patients are, they're all unique. They're all special. They all have their own problems that they have to deal with.
So I can't pinpoint for you that where it says, it's a patient that's, 30 to 50 years old that has had, two bouts of pneumonia, has bronchiectasis, has asthma, has COPD, has this, has that. I mean, sure, if you go to the ASCENIV website and you click around, you can get a general sense of the types of comorbidities and the types of problems that we believe make up the subset of the broader PIDD population than incentive targets, but it really is, if doctors could know offhand which patient was not going to do well on a standard IG, we would know that much more about the disease and the genetic defects that these people have, but unfortunately they don't.
So most patients typically start out, I can't speak that I know of very many patients who are being newly diagnosed with primary immune deficiency and ASCENIV as their first product. The majority of the patients have been on IG for a year or longer and they just haven't done well. That's the one underlying factor that I can say that, I hear from our commercial and our medical affairs team that unifies these patients together.
If we were going to have an incentive support group, everyone would say, I imagine, I was on another IG, I wasn't doing well, and my doctor suggested that I switch to this. Or I wasn't doing well, I did some research, I found this drug, I presented it to my doctor, and my doctor said, you know what, it's worth a shot, let's try it. So hopefully that answers your question. But what I will say is that, the subset is quite large, and we certainly have not penetrated all of the problematic patients who are currently receiving IG. So I still think that there's more room to grow.

Kristen Brianne Kluska

And I know one avenue for the quarter-over- quarter revenue growth has been due to the product mix and the associated margins, but you did point out specifically for this quarter that you're seeing a record number of patients as well. So I wanted to ask what's been the key factors if you can dig into this trend? Is it greater awareness? Is it just a continuous unmet need? What are you seeing to kind of get to these record number of patients now?

Adam S. Grossman

No, I appreciate the question. And not to use my Shark Tank analogies, but I think we've really locked in on how to acquire customers. And we're spending only on programs that really target our patient population. Our MSL team, our medical affairs team is doing a great job. I think that they really understand the drug. I think that our sales force is pounding the pavement. They love traveling. I've never seen a group of people that are more dedicated, but they're out there and we're hitting all the right meetings. We're hitting all the regional meetings. We're hitting all the right outpatient infusion companies and we're talking to docs.
We're sponsoring medical education programs. We sponsor the Clinical Immunology Society Summer School. I mean we're doing things that are really meaningful and I think are impacting and you know, look it's again It's still a new product and we're still we still have a lot of room to grow said a couple of times today, but what I'll say is that the awareness is there. I believe that in our small subset of clinical immunology physicians and infectious disease consults to the clinical immunology programs, this is not something that they haven't heard. They've seen it at IVP. They've seen it at CIS, at (inaudible), for multiple years.
And I think people have asked that question. I'll tell you that our commercial force, MSL, market access, reimbursement, national accounts, and ultimately sales and marketing, when they're at these shows, no one's saying, I was dead show, we didn't get a lot of leads. People are continuing to come up and ask us questions. Explain to me how this is made. Explain to me why this is different. Explain, explain, explain. I mean, we wouldn't be investing in these programs if we didn't see that we were gaining penetration from it.
So what I can say is that, I'm really excited about the patient testimonial campaign that's going to be rolling out there. I think it's meaningful to the nurses that attend these meetings. They spend a lot more time with the patients in the docs. And I think that the doctors are really seeing that they've got something in their armamentarium that is not an end-all be-all, but it certainly is something different that helps move the peg forward. And we think the trends are going to continue.

Operator

Ladies and gentlemen, this will conclude our question-and-answer portion of the call. I'd like to turn it back to Adam now for additional closing remarks.

Adam S. Grossman

I just want to say thank you to our staff. I mean, honestly, it's been a long road for all of us. Some of you have been here a long time. Some of you have been here a short time, but we can't do it without each and every one of you. To our shareholders, we appreciate you putting up with this, but we're finally showing you profitability, and we're going to continue to under-promise and over-deliver, so stick with us.
Thank you again for your confidence and support everybody. It truly is -- this is a very exciting day for us at ADMA Biologics, and I hope everyone listening is very proud. I'm proud of all of you, and I'm proud to lead this organization where we're really making an impact on patients' lives, who may not have a voice.
So with that, have a good evening. Donate plasma out there, you're going to help save a life. And that's all I got to say. Have a great evening.

Operator

Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.