anip-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


o			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-31812

ANI PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


Delaware			58-2301143
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification Number)

210 Main Street West

Baudette, Minnesota 56623

(Address of principal executive offices)

(218) 634-3500

(Registrant’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on which registered:

Common Stock

ANIP

Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 3, 2024 there were 20,961,649 shares of common stock and 10,864 shares of class C special stock of the registrant outstanding.

Table of Contents

ANI PHARMACEUTICALS, INC.

FORM 10-Q — Quarterly Report

For the Quarterly Period Ended March 31, 2024

TABLE OF CONTENTS


		Page
PART I —FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	5
	Condensed Consolidated Balance Sheets — As of March 31, 2024 and December 31, 2023	5
	Condensed Consolidated Statements of Operations — For the Three Months Ended March 31, 2024 and 2023	6
	Condensed Consolidated Statements of Comprehensive Income — For the Three Months Ended March 31, 2024 and 2023	7
	Condensed Consolidated Statements of Changes in Mezzanine Equity and Stockholders’ Equity — For the Three Months Ended March 31, 2024 and 2023	8
	Condensed Consolidated Statements of Cash Flows — For the Three Months Ended March 31, 2024 and 202 3	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II —OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	44
Signatures		46

Table of Contents

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and certain information incorporated herein by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements include, but are not limited to, statements about future operations, strategies and growth potential, the revenue potential (licensing, royalty and sales) of products we sell, development timelines, expected timeframe for submission of new drug applications, abbreviated new drug applications, or supplemental new drug applications to the U.S. Food and Drug Administration (the “FDA”), pipeline or potential markets for our products, selling and marketing strategies and associated costs to support the sales of Purified Cortrophin® Gel (Repository Corticotropin Injection USP) (“Cortrophin Gel”), impact of accounting principles, litigation expenses, liquidity and capital resources, the impact of global pandemics on our business, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “plans,” “potential,” “future,” “believes,” “intends,” “continue,” other words of similar meaning, derivations of such words, and the use of future dates. Such forward-looking statements are based on the reasonable beliefs of our management as well as assumptions made by and information currently available to our management. Readers should not put undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified; therefore, our actual results may differ materially from those described in any forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in our periodic reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including those discussed in the “Risk Factors” section in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and the following factors:

•Cortrophin Gel is our first rare disease pharmaceutical product. To the extent we are not able to continue to achieve commercial success with this product, including expanding the market and gaining market share, our business, financial condition, and results of operations will be negatively impacted;

•our approved products, including Cortrophin Gel, may not achieve commercialization at levels of market acceptance that will continue to allow us to achieve profitability;

•acquisitions and investments could disrupt our business and harm our financial position and operating results;

•the limited number of suppliers for our active pharmaceutical ingredients (“API”) could result in lengthy delays in production if we need to change suppliers;

•delays or failure in obtaining and maintaining approvals by the FDA of the products we sell;

•changes in policy or actions that may be taken by the FDA and other regulatory agencies, including drug recalls;

•acceptance of our products at levels that will allow us to achieve profitability;

•our ability to develop, license or acquire, and commercialize new products;

•the level of competition we face and the legal, regulatory and/or legislative strategies employed by our competitors to prevent or delay competition from generic alternatives to branded products;

•our ability to protect our intellectual property rights;

•the impact of legislative or regulatory reform on the pricing for pharmaceutical products;

•the impact of any litigation to which we are, or may become, a party;

•our ability, and that of our suppliers, development partners, and manufacturing partners, to comply with laws, regulations and standards that govern or affect the pharmaceutical and biotechnology industries;

•our ability to maintain the services of our key executives and other personnel; and

•general business and economic conditions, such as inflationary pressures, geopolitical conditions including, but not limited to, the conflict between Russia and the Ukraine, the conflict between Israel and Gaza, conflicts related to the attacks on cargo ships in the Red Sea, and the effects and duration of outbreaks of public health emergencies.

These factors should not be construed as exhaustive and should be read in conjunction with our other disclosures, including but not limited to our Annual Report on Form 10-K for the year ended December 31, 2023, including the factors described in “Item 1A. Risk Factors.” Other risks may be described from time to time in our filings made under the securities laws, including our quarterly reports on Form 10-Q and our current reports on Form 8-K. New risks emerge from time to time. It is not possible for our management to predict all risks. The forward-looking statements contained in this document are made only as of the date of this document. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Table of Contents

The Company may use its investor relations website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s investor relations website. We encourage investors and others interested in our Company to review the information we post on our investor relations website in addition to filings with the SEC, press releases, public conference calls and webcasts. Information contained on the Company’s website is not included as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Table of Contents

Part I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited)

ANI PHARMACEUTICALS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)


	March 31, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	228,597	$	221,121
Accounts receivable, net of $91,825 and $97,262 of adjustments for chargebacks and other allowances at March 31, 2024 and December 31, 2023, respectively	172,418		162,079
Inventories	113,837		111,196
Assets held for sale	—		8,020
Prepaid expenses and other current assets	16,050		17,400
Investment in equity securities	9,655		—
Total Current Assets	540,557		519,816
Non-current Assets
Property and equipment, net	48,526		44,593
Deferred tax assets, net of deferred tax liabilities and valuation allowance	87,607		90,711
Intangible assets, net	196,044		209,009
Goodwill	28,221		28,221
Derivatives and other non-current assets	13,569		12,072
Total Assets	$	914,524	$	904,422
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current Liabilities
Current debt, net of deferred financing costs	$	850	$	850
Accounts payable	49,430		36,683
Accrued royalties	15,475		16,276
Accrued compensation and related expenses	9,526		23,786
Accrued government rebates	9,509		12,168
Income taxes payable	11,402		8,164
Returned goods reserve	32,853		29,678
Current contingent consideration	414		12,266
Accrued expenses and other	7,430		5,606
Total Current Liabilities	136,889		145,477
Non-current Liabilities
Non-current debt, net of deferred financing costs and current component	284,607		284,819
Non-current contingent consideration	11,160		11,718
Other non-current liabilities	5,055		4,809
Total Liabilities	$	437,711	$	446,823
Commitments and Contingencies (Note 12)
Mezzanine Equity
Convertible Preferred Stock, Series A, $0.0001 par value, 1,666,667 shares authorized; 25,000 shares issued and outstanding at March 31, 2024 and December 31, 2023	24,850		24,850
Stockholders’ Equity
Common Stock, $0.0001 par value, 33,333,334 shares authorized; 21,373,266 shares issued and 20,980,307 outstanding at March 31, 2024; 20,730,896 shares issued and 20,466,953 shares outstanding at December 31, 2023	2		2
Class C Special Stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	—		—
Preferred Stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	—		—
Treasury stock, 392,959 shares of common stock, at cost, at March 31, 2024 and 263,943 shares of common stock, at cost, at December 31, 2023	(18,742)		(10,081)
Additional paid-in capital	523,628		514,103
Accumulated deficit	(62,331)		(80,132)
Accumulated other comprehensive income, net of tax	9,406		8,857
Total Stockholders’ Equity	451,963		432,749
Total Liabilities, Mezzanine Equity, and Stockholders’ Equity	$	914,524	$	904,422

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANI PHARMACEUTICALS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2024		2023
Net Revenues	$	137,430	$	106,786

Operating Expenses
Cost of sales (excluding depreciation and amortization)	49,157		37,708
Research and development	10,511		5,924
Selling, general, and administrative	48,021		36,468
Depreciation and amortization	14,686		14,700
Contingent consideration fair value adjustment	90		961
Restructuring activities	—		1,130
Gain on sale of building	(5,347)		—

Total Operating Expenses, net	117,118		96,891

Operating Income	20,312		9,895

Other Income (Expense), net
Unrealized gain on investment in equity securities	9,655		—
Interest expense, net	(4,600)		(7,696)
Other expense, net	(32)		(34)

Income Before Income Tax Expense	25,335		2,165

Income tax expense	7,128		726

Net Income	$	18,207	$	1,439

Dividends on Series A Convertible Preferred Stock	(406)		(406)

Net Income Available to Common Shareholders	$	17,801	$	1,033

Basic and Diluted Income Per Share:
Basic Income Per Share	$	0.84	$	0.06
Diluted Income Per Share	$	0.82	$	0.06

Basic Weighted-Average Shares Outstanding	19,099		16,392
Diluted Weighted-Average Shares Outstanding	19,422		16,531