ANI PHARMACEUTICALS INC
For the period ended Dec 31, 2023. Filed Apr 5, 2024.
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Dec 31, 2023 · Filed Apr 5, 2024
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrantx
Filed by a Party other than the Registranto
Check the appropriate box:
| o | Preliminary Proxy Statement |
|---|---|
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| x | Definitive Proxy Statement |
| o | Definitive Additional Materials |
| o | Soliciting Material Pursuant to §240.14a-12 |
ANI PHARMACEUTICALS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
|---|---|
| o | Fee paid previously with preliminary materials. |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
April 5, 2024
Dear Fellow Stockholders:
Over the past several years, ANI has successfully executed on its purpose to “Serve Patients, Improve Lives,” while also growing revenue at a 35% compounded annual growth rate since 2021.
I am grateful to the entire ANI team, whose hard work and dedication contributed to our record performance in 2023. We posted $486.8 million in total revenue for the year, an increase of 54% over 2022. Adjusted non-GAAP EBITDA was a record $133.8 million, up 140% year-over-year, and adjusted non-GAAP earnings per share was $4.71, an increase of 247% from 2022. We generated $119.0 million in cash from operations, resulting in a strong balance sheet to support ANI’s key revenue growth drivers—our Rare Disease business and our Generics business—and with our Established Brands business continuing to deliver consistently over time.
Rare Disease – Driving Current and Future Growth
Our lead Rare Disease asset, Purified Cortrophin® Gel (“Cortrophin Gel”), continued its positive launch trajectory with reported net sales of $112.1 million in 2023, a year-over-year increase of 169%. Indeed, the launch momentum for Cortrophin Gel accelerated throughout 2023 as our Rare Disease team drove sequential growth in new cases initiated, new patient starts, and new unique prescribers in each quarter. Cortrophin Gel demand growth continued across our core therapeutic areas of rheumatology, neurology, and nephrology, and our launch into pulmonology quickly gained traction. In October, we also launched a new 1 mL vial size of Cortrophin Gel for the treatment of acute gouty arthritis flares; Cortrophin Gel is the only adrenocorticotropic hormone (ACTH) product with this indication.
Our Rare Disease team also helped build awareness and drive expansion of the overall ACTH market, which grew 15% in terms of unit volume in 2023 as compared to 2022, according to IQVIA. While the number of patients being treated with ACTH therapy in the U.S. remains lower today than it was several years ago, the category has experienced seven consecutive quarters of year-over-year growth since the launch of Cortrophin Gel in the first quarter of 2022, and the outlook for the category remains robust.
With our patient-first focus, we are also working to enhance support and remove challenges for patients starting ACTH therapy and their healthcare providers. To that end, we are investing in both R&D and medical affairs to support the patient journey.
Strength in Generics and Established Brands
Our Generics business also performed well in 2023. We delivered 11 new product launches, filed 20 new products with the FDA, and supplied over 1.5 billion doses of therapeutics to patients in need. All of this was accomplished while maintaining a stellar compliance track record with successful FDA audits across all of our sites in 2022 and 2023. We are proud of these achievements and believe our Generics business will remain a trusted and reliable partner of choice for our customers.
One of the hallmarks of our Generics business is our diverse portfolio. ANI has more than 100 product families that accounted for sales of nearly $270 million in 2023, with our largest product accounting for approximately 3% of total company revenues and approximately 6% of generics revenues.
Our Established Brands business generated strong revenue growth in 2023, benefiting in part from supply tailwinds. As our highest gross margin business and a strong cash flow generator, Established Brands is an important component of our diversified revenue base.
Looking Ahead
I'm proud of what our team accomplished in 2023, and we are optimistic about 2024. We expect our Rare Disease business to be our largest revenue growth driver in 2024 and going forward. Cortrophin Gel is still early in its launch, and we see significant room for share growth in both current and new therapeutic areas. We believe that we have the right team in place to capture the full value of this very important asset.
In addition, having built a strong Rare Disease platform, we are looking for opportunities to increase its scope and scale and are actively exploring options to expand our portfolio through M&A and/or in-licensing. We are also evaluating assets that can leverage the rest of our Rare Disease platform, which includes specialty pharmacy, distribution, market access, and medical affairs. Thoughtful target selection and rigorous diligence are fundamental to our mission, and we remain committed to being intentional in finding the most beneficial transaction for ANI and its stakeholders.
We expect another solid year for our Generics business as we leverage our high-performance R&D team, operational excellence, and U.S.-based manufacturing footprint to drive high single-digit to low double-digit revenue growth. Established Brands will continue to generate cash while addressing patient needs through reliability of supply, a unique set of commercial capabilities, and opportunistic business development to expand the portfolio. The high gross margins and strong cash flow from this business complement and strengthen the overall ANI portfolio.
We look forward to continuing this great momentum and remain focused on making critical investments to fuel growth.
We remain steadfastly committed to our core values: Patient First, Teamwork, Innovation, Integrity & Compliance, Accountability & Transparency, and Commitment to Excellence. I’d like to thank our entire ANI ecosystem—our employees, partners, patients, providers, and shareholders—for your ongoing support of ANI. Together, we can continue to “Serve Patients, Improve Lives.”
Sincerely,
Nikhil Lalwani
Chief Executive Officer
The Board of Directors unanimously recommends that our stockholders vote “FOR” all of the proposals presented in the Proxy Statement.
Your vote is very important. Even if you plan to attend the Annual Meeting, if you are a stockholder of record of Common Stock, Series A Preferred Stock or Class C Special Stock, please submit your proxy by Internet, mail or telephone as soon as possible to make sure that your shares are represented at the Annual Meeting, or you may submit your proxy at the Annual Meeting. If you hold your shares of Common Stock, Series A Preferred Stock or Class C Special Stock in “street name” through a bank, broker or other nominee, you must vote in accordance with the voting instructions provided to you by such bank, broker or other nominee, which include instructions for voting by Internet or telephone.
Forward-Looking Statements
In this communication we have made certain forward-looking statements within the meaning of the federal securities laws. These statements are based on management’s estimates and assumptions and are subject to risks and uncertainties. Such statements include, but are not limited to, statements about the Company’s corporate strategy, growth strategy, future plans, 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. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the Securities and Exchange Commission, including the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company gives no assurance that it will achieve its expectations.
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held Tuesday, May 21, 2024, 9:00 A.M. (Eastern Time)
Virtual Meeting Only — No Physical Meeting Location
| TIME AND DATE | 9:00 A.M. Eastern Time on Tuesday, May 21, 2024, virtual |
|---|---|
| PLACE | www.virtualshareholdermeeting.com/ANIP2024 |
| AGENDA | •Elect the eight director nominees named in the Proxy Statement •Ratify the appointment of EisnerAmper LLP as our independent registered public accounting firm for the year ending December 31, 2024 •Advisory vote to approve the compensation of the Company’s named executive officers •Approve the Company's Amended and Restated 2022 Stock Incentive Plan •Transact such other business as may properly come before the annual meeting (including adjournments and postponements) |
| RECORD DATE | March 27, 2024 |
The Company’s 2024 Annual Meeting of Stockholders (the “Annual Meeting”) will be held as a virtual-only meeting on Tuesday, May 21, 2024 at 9:00 A.M. Eastern Time. We have adopted a virtual format for the Annual Meeting to provide a safe, consistent and convenient experience to all shareholders regardless of location. You will be able to attend the meeting, submit your questions and comments during the meeting, and vote your shares at the meeting by visiting www.virtualshareholdermeeting.com/ANIP2024.
The platform for the virtual Annual Meeting includes functionality that affords validated stockholders the same meeting participation rights and opportunities they would have at an in-person meeting. Instructions to access and log into the virtual Annual Meeting are provided in the accompanying Proxy Statement.
Only holders of the Company’s Series A Convertible Preferred Stock, Common Stock and Class C Special Stock of record as of March 27, 2024 are entitled to notice of and to vote at the Annual Meeting.
Your vote is very important. Regardless of whether you plan to attend the virtual Annual Meeting, please promptly vote your shares. You may vote your shares over the Internet or via a toll-free telephone number. You may submit your proxy for the Annual Meeting by completing, signing, dating and returning your proxy in the pre-addressed envelope provided. For specific instructions on how to vote your shares, please refer to the section titled “Voting Methods” on page 5 of the Proxy Statement.
It remains very important that your shares are represented and voted at the Annual Meeting. We therefore strongly encourage you to vote in advance of the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 2024.
THE NOTICE OF THE 2024 ANNUAL MEETING, THE 2024 PROXY STATEMENT AND THE 2023 ANNUAL REPORT TO STOCKHOLDERS ARE AVAILABLE AT WWW.PROXYVOTE.COM.
By Order of the Board of Directors,
Meredith W. Cook
Senior Vice President, General Counsel and Corporate Secretary
Princeton, New Jersey
April 5, 2024
TABLE OF CONTENTS
| Page | |
|---|---|
| PROPOSAL 1: ELECTION OF DIRECTORS | 6 |
| CORPORATE GOVERNANCE | 11 |
| PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024 | 18 |
| AUDIT AND FINANCE COMMITTEE REPORT | 20 |
| EXECUTIVE OFFICERS | 21 |
| EXECUTIVE COMPENSATION | 23 |
| PROPOSAL 3: ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION | 46 |
| PROPOSAL 4: APPROVAL OF THE AMENDED AND RESTATED 2022 STOCK INCENTIVE PLAN | 47 |
| PRINCIPAL STOCKHOLDERS | 60 |
| CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 63 |
| OTHER MATTERS | 64 |
| ADDITIONAL INFORMATION | 64 |
i
PROXY STATEMENT
FOR 2024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 9:00 A.M. Eastern Time
on Tuesday, May 21, 2024
Our Board of Directors (the “Board”) solicits your proxy for the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) and any postponement or adjournment of the Annual Meeting for the matters set forth in “Notice of 2024 Annual Meeting of Stockholders.” The Annual Meeting will be held virtually on Tuesday, May 21, 2024 at 9:00 A.M. Eastern Time atwww.virtualshareholdermeeting.com/ANIP2024. This Proxy Statement is being made available to holders of the Company’s Series A Convertible Preferred Stock, $0.0001 par value per share (the “Series A Preferred Stock”),the Company’s Common Stock, $0.0001 par value per share (the “Common Stock”) and the Company’s Class C Special Stock, $0.0001 par value per share (the “Class C Special Stock” and the holders of the Series A Preferred Stock, the Common Stock and the Class C Special Stock together, the “Stockholders”) beginning on April 5, 2024.
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING
| Record Date | March 27, 2024 |
|---|---|
| Quorum Requirement | Holders of at least one-third of the outstanding shares of the Company’s capital stock issued and outstanding and entitled to vote on the record date must be present at the Annual Meeting or represented by proxy. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum. |
| Voting Shares Outstanding on the Record Date | 25,000 shares of Series A Preferred Stock, 20,980,307 shares of Common Stock and 10,864 shares of Class C Special Stock outstanding as of March 27, 2024. The 25,000 shares of Series A Preferred Stock outstanding as of March 27, 2024 are entitled to cast an aggregate of 610,413 votes. The 20,980,307 shares of Common Stock and 10,864 shares of Class C Special Stock outstanding as of March 27, 2024 are entitled to cast an aggregate of 20,991,171 votes, which is one vote per share. |
| Voting by Proxy Voting at the Meeting | Internet, telephone, or mail: We encourage Stockholders to vote in advance of the Annual Meeting, even if they plan to access the Annual Meeting virtually. In order to vote in advance, proxies submitted by Internet or telephone must be received by 11:59 p.m. Eastern Time on May 20, 2024. Stockholders can vote during the Annual Meeting, using the Internet. Beneficial holders who wish to vote during the Annual Meeting must obtain a valid legal proxy and control number from their broker, bank, or other nominee prior to the date of the Annual Meeting giving them the right to vote the shares. Voting by a Stockholder during the Annual Meeting will replace any previous votes. |
| Changing Your Vote | If you have given your proxy and later wish to revoke it, you may do so at any time before it is voted at the Annual Meeting by (a) delivering a proxy revocation or another duly executed proxy bearing a later date to our Secretary at 210 Main Street West, Baudette, MN 56623 or (b) casting a later vote via the Internet or telephone, or (c) attending the Annual Meeting and voting online. Attendance online at the Annual Meeting will not revoke a proxy unless the Stockholder actually votes online during the virtual meeting. Your latest Internet or telephone proxy is the one that will be counted. If you hold shares through a broker, bank, or other nominee, you may revoke any prior voting instructions by contacting that firm. |
Votes Required to Adopt Proposals
| Proposal | Vote Required | Voting Choices | Broker Discretionary Voting Allowed |
|---|---|---|---|
| Election of the director nominees named in the Proxy Statement | The number of votes cast by Stockholders present at the Annual Meeting in person (virtually) or by proxy and voting “FOR” a nominee must exceed the number of votes cast “AGAINST” the nominee. | “FOR”, “AGAINST”, or “ABSTAIN” | No |
| Ratification of the appointment of EisnerAmper LLP as our independent registered public accounting firm for the year ending December 31, 2024 | The vote of the holders of a majority of the stock represented and entitled to vote on such proposal. | “FOR”, “AGAINST”, or “ABSTAIN” | Yes |
| Advisory vote to approve the compensation of the Company’s named executive officers | The vote of the holders of a majority of the stock represented and entitled to vote on such proposal. | “FOR”, “AGAINST”, or “ABSTAIN” | No |
| Approval of the Company's Amended and Restated 2022 Stock Incentive Plan | The vote of the holders of a majority of the stock represented and entitled to vote on such proposal. | “FOR”, “AGAINST”, or “ABSTAIN” | No |
Each holder of Common Stock and Class C Special Stock represented at the Annual Meeting will be entitled to cast one vote for each share of Common Stock and Class C Special Stock, as applicable, entitled to vote and held by such holder as of the Record Date. Each holder of Series A Preferred Stock will be entitled to a number of votes equal to the largest number of whole shares of common stock into which all shares of Series A Preferred Stock held of record by such holder could then be converted as of the Record Date. Stockholders do not have cumulative voting rights. The Series A Preferred Stock, the Common Stock and the Class C Special Stock vote together as a single class.
| Effect of Abstentions and Broker Non-Votes | Shares voting “abstain” and broker non-votes votes (shares held by brokers that do not have discretionary authority to vote on a matter and have not received voting instructions from their clients) have no effect on the election of directors. The proposal to ratify the appointment of EisnerAmper LLP as our independent registered public accounting firm for the year ending December 31, 2024 is considered a “routine” matter under applicable SEC and stock exchange rules, and accordingly, broker non-votes are not applicable to such proposal and abstentions will have the same effect as a vote “AGAINST” such proposal. For all other proposals, abstentions will have the same effect as vote “AGAINST” such proposal and broker non-votes have no effect. If you are a beneficial holder and do not provide specific voting instructions to your broker or custodian of your shares, your broker or custodian will not be authorized to vote on any of the matters other than the ratification of the appointment of EisnerAmper LLP. Accordingly, we encourage you to vote promptly, even if you plan to attend the Annual Meeting. |
|---|---|
| Voting Instructions | If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you are a Stockholder of record and you submit proxy voting instructions but do not direct how to vote on each proposal, the persons named as proxies will vote as the Board recommends on each proposal. The persons named as proxies will vote on any other matters properly presented at the Annual Meeting in accordance with their judgment. Our bylaws set forth requirements for advance notice of nominations and agenda items for the Annual Meeting, and we have not received timely notice of any such matters that may be properly presented for voting at the Annual Meeting, other than the items from the Board described in this Proxy Statement. |
| Proxy Solicitation Costs | The expense of soliciting proxy cards, including the costs of preparing, assembling and mailing the Notice of 2024 Annual Meeting of Stockholders, proxy statement and proxy card, will be borne by the Company. Our directors and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. |
| Voting Results | We expect to announce preliminary results at the Annual Meeting. We will report final results in a filing with the U.S. Securities and Exchange Commission (“SEC”) on Form 8-K. |
Access and Log-in Instructions for Virtual Annual Meeting
The platform for the virtual Annual Meeting includes functionality that affords validated Stockholders the same meeting participation rights and opportunities they would have at an in-person meeting. Instructions to access and log into the virtual Annual Meeting are provided below, and once admitted, Stockholders may submit questions and vote their shares by following the instructions that will be available on the Annual Meeting website.
To be admitted to the Annual Meeting, go to www.virtualshareholdermeeting.com/ANIP2024 and enter the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. Online access to the Annual Meeting will open at 8:45 a.m. Eastern Time to allow time for you to log-in prior to the start of the live audio webcast of the Annual Meeting at 9:00 a.m. Eastern Time.
If you are unable to locate your proxy materials containing your 16-digit control number and cannot log-in as a validated Stockholder, you may opt to participate in the Annual Meeting as a “guest,” in which case you will be able to hear the audio webcast but will not be able to utilize the question, voting, or other functions noted above.
How Beneficial Owners May Participate in the Virtual Annual Meeting
If your shares are registered in the name of your bank, broker, or other nominee, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner, to vote or ask questions at the virtual Annual Meeting, you must first obtain a valid legal proxy from your bank, broker, or other nominee. Follow the instructions from your bank, broker, or other nominee included with the proxy materials that you are provided, or contact your bank, broker, or other nominee to request a legal proxy form.
Voting Methods
BEFORE the Annual Meeting:
Vote by Internet: Go to www.proxyvote.com until 11:59 p.m. Eastern Time on May 20, 2024.
Vote by Phone: Call toll-free 1-800-690-6903 until 11:59 p.m. Eastern Time on May 20, 2024.
Vote by Mail: Complete, sign, and date the proxy card/voting instruction card and return it in the postage-paid envelope that is enclosed with your proxy materials.
DURING the Annual Meeting:
Vote by Internet: Go to www.virtualshareholdermeeting.com/ANIP2024 and vote during the Annual Meeting by entering the 16-digit control number included in your proxy materials and following the instructions on the Annual Meeting website.
INTERNET AVAILABILITY OF PROXY MATERIALS
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 2024:
THE NOTICE OF THE 2024 ANNUAL MEETING, THE PROXY STATEMENT, AND THE 2023 ANNUAL
REPORT TO STOCKHOLDERS ARE AVAILABLE AT WWW.PROXYVOTE.COM.
QUESTIONS
| For questions regarding | Contact via mail or email: |
|---|---|
| Annual meeting | ANI Pharmaceuticals, Inc. 210 Main Street West Baudette, Minnesota 56623 Attn: Investor Relations Email: IR@anipharmaceuticals.com |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.