ANI PHARMACEUTICALS INC
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
ANIP$67.41-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001023024-24-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001023024-24-000102
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 112 previous paragraphs and 135 current paragraphs.
41 unchanged; 51 reworded; 41 added; 18 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is a diversified bio-pharmaceutical company committed to its mission of “Serving Patients, Improving Lives” by developing, manufacturing, and commercializing innovative and high quality therapeutics. Our Company is focused on delivering sustainable growth through its Rare Disease business, which markets novel products in the areas of ophthalmology, rheumatology, nephrology, neurology, and pulmonology; its Generics business, which leverages R&D expertise, operational excellence, and U.S.-based manufacturing; and its Established Brands business.
Current report
On September 16, 2024, the Company completed its previously announced acquisition of Alimera Sciences, Inc., a Delaware corporation (“Alimera”) pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2024 (the “Merger Agreement”), by and among the Company, Alimera and ANIP Merger Sub INC., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into Alimera, with Alimera surviving the merger as a wholly-owned subsidiary of the Company (the “Merger”). In connection with the Merger, the Company added two growing and durable assets, ILUVIEN® (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States (“U.S.”) and 24 countries for the treatment of diabetic macular edema (“DME”) and YUTIQ® (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment and prevention of non-infectious uveitis affecting the posterior segment of the eye (“NIU-PS”).
Current report
During the first quarter of 2024, ANI launched a targeted ophthalmology-focused sales force for Cortrophin Gel. The team has continued to gain momentum in ophthalmology, driving significant growth in the number of new patient starts in the second quarter and third quarter to date. Importantly, the addition of Alimera expands the reach of the ophthalmology sales team and believes there will be significant overlap between high potential prescribers of Cortrophin Gel, ILUVIEN and YUTIQ.
Current report
Acquisition of Alimera Sciences, Inc.
Current report
In addition to the amounts payable to the holders thereof in connection with the Closing, all of the outstanding awards of restricted stock with respect to shares of Alimera Common Stock (each, an “Alimera RSA”), each Alimera Performance Stock Unit (“Alimera PSU”), each Alimera Restricted Stock Unit (“Alimera RSU”) and each Alimera Warrant that were outstanding immediately prior to the Effective Time were automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying the applicable instrument.
Current report
Each stock option previously granted by Alimera to purchase Alimera Common Stock (each, an “Alimera Option”) that was outstanding and unexercised as of the Effective Time and which had a per share exercise price that was less than the Closing Cash Consideration was, in addition to the amounts payable to the holders thereof in connection with the Closing, automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying such Alimera Option. No other Alimera Options were cancelled and converted into the right to receive a CVR, provided that each Alimera Option with a per share exercise price greater than or equal to the Closing Cash Consideration but less than the Total Consideration (as defined in the Merger Agreement) may receive a payment in connection with the payout of the CVRs (if any).
Current report
New Capital Structure
Current report
On August 13, 2024, we completed an offering of $316.25 million aggregate principal amount of 2.25% convertible senior notes due September 1, 2029. The Company utilized a majority of the net proceeds as well as cash from its balance sheet to repay in full its existing senior secured term loan facility with total unpaid principal of$292.5 million. The initial conversion price of the convertible notes is $74.11 per share. Concurrent with the convertible senior notes offering, the Company used $40.6 million of the net proceeds to enter into capped call transactions. The cap price of the capped call transactions is initially $114.02 per share, which represents a premium of 100% over the last reported sale price of the Company’s common stock on August 7, 2024. The capped call transactions are expected generally to reduce the potential dilution to ANI’s common stock upon any conversion of the notes up to the cap price of $114.02.
Current report
To fund the Alimera Acquisition, the Company entered into a new senior secured credit agreement consisting of a $325.0 million delayed draw term loan facility and $75.0 revolving credit facility on August 13, 2024. On September 16, 2024 the Company drew the full $325.0 million term loan; the $75.0 million revolving credit facility remains available to borrow. Refer to the Liquidity and Capital Resources section below for further information related to the debt agreements.
Current report
•Selling, general, and administr ative expenses increased from $42.0 million to $79.1 million, an increase of $37.1 million, or 88.2%, due to increased employment related costs, investment in Rare Disease sales and marketing infrastructure and activities, legal expenses, transaction and integration expenses incurred in connection with the acquisition of Alimera of approximately $10 million, severance expense of approximately $5.3 million and the settlement of all outstanding equity awards held by Alimera employees of approximately $9.2 million, and an overall increase in activities to support revenue growth.
Current report
•Depreciation and amortization expense was $15.7 million for the three months ended September 30, 2024, compared to $15.2 million for the same period in 2023.
Current report
•Other expense, net, increased to approximately $2.5 million, primarily due to the fees paid to JPMorgan Chase Bank, N.A. and Blackstone Credit & Insurance of $2.8 million pursuant to the terms of the debt commitment letter, dated June 21, 2024, entered into in connection with the acquisition of Alimera, offset by other income.
Current report
•We recorded a loss on debt extinguishment of approximately $7.5 million, comprised of the write-off unamortized deferred financing fees related to the Credit Facility. On August 13, 2024, the Company entered into the 2.25% Convertible Senior Notes due 2029 (as described in Note 7 “2.25% Convertible Senior Notes” to the Notes to Condensed Consolidated Financial Statements). The proceeds of the Convertible Senior Notes were used to repay the Truist Credit Facility in its entirety, approximately$294.0 million, comprised of $292.5 million of unpaid principal, $1.2 million in accrued and unpaid interest, and $0.3 million of legal fees. There was nocomparable transaction in the three months ended September 30, 2023.
Current report
Income Tax (Benefit) Expense
Current report
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Current report
•Depreciation and amortization expense was $45.1 millionfor the nine months ended September 30, 2024, compared to $44.6 million for the same period in 2023.
Current report
•Other expense, net, increased to approximately $2.7 million, primarily due to the fees paid to JPMorgan Chase Bank, N.A. and Blackstone Credit & Insurance of $2.8 million pursuant to the terms of the debt commitment letter, dated June 21, 2024, entered into in connection with the acquisition of Alimera, offset by other income.
Current report
•We recorded a loss on debt extinguishment of approximately $7.5 million, comprised of the write-off unamortized deferred financing fees related to the Credit Facility. On August 13, 2024, the Company entered into the 2.25% Convertible Senior Notes due 2029 (as described in Note 7 “2.25% Convertible Senior Notes” to the Notes to Condensed Consolidated Financial Statements). The proceeds of the Convertible Senior Notes were used to repay the infrastructure Credit Facility in its entirety, approximately$294.0 million, comprised of $292.5 million of unpaid principal, $1.2 million in accrued and unpaid interest, and $0.3 million of legal fees. There was nocomparable transaction in the nine months ended September 30, 2023.
Current report
Income Tax (Benefit) Expense
Current report
Term Loan A
Current report
The facilities are secured by a lien on substantially all of the personal property owned by the Company and its material wholly-owned domestic subsidiaries and is guaranteed by all of the Company’s material wholly-owned domestic subsidiaries. The New Credit Facility matures on the date that is five years following the closing date of the New Credit Agreement, provided that if any of the Notes (defined below) remain outstanding on the date that is 91 days prior to the maturity date of the Notes, the New Credit Facility will mature on such date unless certain terms are met.
Current report
At the Company’s option, loans under the New Credit Facility accrue interest at a per annum rate equal to (i) the alternate base rate or (ii) the adjusted term SOFR rate for an interest period of one, three or six months, plus a spread depending on the Company’s first lien net leverage ratio, between 1.25% and 2.00% in the case of ABR loans and between 2.25% and 3.00% in the case of adjusted term SOFR rate loans. A commitment fee accrues on the unutilized commitments under the TLA Revolver and, from and after the date that is two months after the closing date of the New Credit Agreement, the TLA at a per annum rate equal between 0.25% and 0.40% depending on the Company’s first lien net leverage ratio.
Current report
The New Credit Agreement contains usual and customary representations and warranties of the parties for credit facilities of this type, subject to customary exceptions and materiality standards. In addition, the Company is required to maintain a first lien net leverage ratio not to exceed 3.00:1.00 (provided, that the lead borrower under the New Credit Agreement may elect to increase the ratio to 3.50:1.00 for four consecutive fiscal quarters following the consummation of a material acquisition) and a minimum interest coverage ratio of 3.00 to 1.00.
Current report
The New Credit Agreement also contains certain customary covenants including but not limited to restrictions on the amount of debt the Company and its restricted subsidiaries may incur and payments the Company and its restricted subsidiaries may make, and events of default, as well as, in the event of an occurrence of an event of default, customary remedies for the Lenders, including the acceleration of any amounts outstanding under the New Credit Agreement.
Current report
On September 16, 2024 (the “Closing Date”) the Company drew the full $325.0 million of Term Loan A principal on September 16, 2024, with proceeds used to finance the acquisition of Alimera, including fees, costs and expenses incurred in connection with the transaction. As of September 30, 2024, the TLA Revolver remains undrawn, and $75.0 million is available for borrowing, subject to certain conditions. The TLA and the TLA Revolver mature on September 16, 2029. The New Credit Facility contains certain contingent acceleration clauses, none of which have been triggered as of September 30, 2024. The cash interest rate and effective rate under the Term Loan A was approximately 7.95% at September 30, 2024.
Current report
2.25% Convertible Senior Notes Due 2029
Current report
On August 07, 2024, the Company entered into a purchase agreement (the “Purchase Agreement”) with the initial purchasers (the “Initial Purchasers”) relating to the issuance of the $275.0 million aggregate principal amount of the Company's Convertible Senior Notes due 2029 (the “Notes”). Pursuant to the terms of the Purchase Agreement, the Company granted the Initial Purchasers an option to purchase up to an additional $41.25 million aggregate principal amount of Notes (the “Option”) for settlement at any time during the thirteen days beginning on, and including, August 7, 2024, which Option was excercised in full on August 8, 2024.
Current report
On August 13, 2024 (the “Closing Date” or “Issue Date”), the Company completed an offering of $316.25 million aggregate principal amount of Notes. The Notes were issued pursuant to an indenture (the “Indenture”) dated as of Augsut 13, 2024 between the Company and U.S. Bank Trust Company, National Association (“Trustee”). The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted. The Notes will accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025. After deducting the initial purchasers’ discounts and commissions of approximately $9.5 million, but before deducting the Company’s offering expenses, the net proceeds to the Company from the offering of the Notes was approximately $306.8 million. After payment of the cost of entering into the Capped Call Transactions (as defined below), the Company used the remainder of the net proceeds from the Notes offering, together with cash on hand, to repay the Company’s existing senior secured credit agreement, dated as of November 19, 2021, by and among the Company, certain of the Company’s subsidiaries, as guarantors, Truist Bank, as administrative agent and other parties thereto, as amended, supplemented or otherwise modified from time to time (as amended, the “Credit Agreement”).
Current report
The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.
Current report
Prior to the close of business on the business day immediately preceding June 1, 2029, holders of the Notes will have the right to convert their Notes only upon the occurrence of certain events as set forth in the Indenture. All or any portion of the Notes may be converted prior to June 1, 2029 at the holders’ option upon the occurrence of any of the following: (i) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2024, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price of the Notes for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate of the Notes on such trading day; (iii) upon the occurrence of certain corporate events or distributions on the Company's common stock, as described in the Indenture; or (iv) if the Company calls such Notes for redemption.
Current report
On or after June 1, 2029 until the close of business on the second scheduled trading day immediately before the maturity date of the Notes, holders may convert all or any portion of their Notes at any time at their election. The initial conversion rate for the Notes is 13.4929 shares of the Company’s common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $74.11 per share of the Company’s common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for holders that convert their Notes in connection with such Make-Whole Fundamental Change, as described in the Indenture.
Current report
Upon conversion of the Notes, the Company will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company’s election, in respect of the remainder, if any, of the Company's conversion obligation.
Current report
Capped Call Transactions
Current report
In connection with the offering of Notes, on August 7, 2024 and August 8, 2024, the Company entered into capped call transactions with certain financial institutions (“Capped Calls”). The Capped Calls each have an initial strike price of $114.02, which represents a premium of 100% over the last reported sale price of the Company’s common stock on August 7, 2024. The Company used approximately $40.6 million of the net proceeds from the offering of the Notes to pay premiums on the Capped Calls.
Current report
The Capped Calls are expected to generally to reduce potential dilution to the Company’s common stock upon any conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reductions and/or offset subject to a cap, based on the cap price of the Capped Calls. The Capped Calls cover, subject to anti-dilution adjustments, approximately 4.3 million shares of the Company's common stock.
Current report
The Capped Calls will expire upon the maturity of the Notes. The Capped Calls are separate transactions entered into by the Company with the financial institution counterparties thereto, the Capped Calls are not part of the terms of the Notes and the Capped Calls do not change the holders’ rights under the Notes. The Capped Calls do not meet the criteria for separate accounting as a derivative as they meet the criteria for equity classification, and the capped call transaction premiums are recorded as a reduction to Additional Paid-In Capital within Shareholders’ Equity, net of deferred income taxes.
Current report
Debt Extinguishment
Current report
Accrued Licensor Payments
Current report
On May 17, 2023, Alimera entered into a product rights agreement with EyePoint Parent which granted Alimera an exclusive and sublicensable right and license under EyePoint Parent’s and its affiliates’ interest in certain of EyePoint Parent’s and its affiliates’ intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, where the Company already has such rights pursuant to the New Collaboration Agreement, and except for China, Hong Kong, Macau, Taiwan, Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam, where Ocumension holds a license from EyePoint Parent. Pursuant to the agreement, Alimera paid EyePoint Parent an upfront payment of $75.0 million and has also made three quarterly guaranteed payments to EyePoint Parent totaling $5.6 million during 2024, with one remaining payment of $1.9 due at December 31, 2024.
Current report
The Company will also pay royalties to EyePoint Parent from 2025 to 2028 at a percentage of mid-to-low double digits of annual U.S. net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $70.0 million in 2025, increasing annually thereafter. Upon making the quarterly payments in the aggregate amount of $7.5 million in 2024, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (18)
Previous report
During 2021 and 2022, we invested significantly in leadership, expertise and infrastructure in the areas of commercialization of rare disease therapies and developed a launch strategy and commercial plan for this product. During this timeframe, we hired a significant number of new employees and assembled and trained our Rare Disease field force. On January 24, 2022, we announced the commercial launch of Cortrophin Gel in the U.S as our foundational Rare Disease asset.
Previous report
Pending merger agreement
Previous report
On June 21, 2024, the Company entered into an Agreement and Plan of Merger with Alimera and ANIP Merger Sub INC. (“Merger Sub”), providing for the merger of Merger Sub with and into Alimera (the “Merger”), with Alimera surviving the Merger as a wholly owned indirect subsidiary of the Company. Capitalized terms used herein, but not otherwise defined, have the meanings set forth in the Merger Agreement.
Previous report
At or immediately prior to the Effective Time, the Company will enter into a contingent value rights agreement (the “CVR Agreement”), pursuant to which each holder of Alimera Common Stock, as well as holders of Alimera Warrants, Alimera Options, Alimera PSUs, Alimera RSAs and Alimera RSUs, may become entitled to contingent cash payments per CVR (each, a “Milestone Payment”), such payment(s) being contingent upon, and subject to, satisfaction of the Milestones (as defined below).
Previous report
The Merger Agreement requires Alimera, as promptly as reasonably practicable, and in any event within 25 business days following the date of the Merger Agreement, to prepare and file with the SEC a proxy statement for the purpose of seeking stockholder approval to the Merger Agreement.
Previous report
Consummation of the Merger is subject to certain conditions, including approval by Alimera’s stockholders, the absence of any legal restraints restraining, enjoining, preventing, prohibiting or otherwise making illegal the consummation of the Merger, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any other specified required regulatory approvals that may be required will have been obtained, and each party’s performance of its obligations in all material respects under the Merger Agreement.
Previous report
In connection with the Merger, JPMorgan Chase Bank, N.A. and Blackstone Credit & Insurance (the “Lenders”) have committed to provide debt financing for the transaction in an aggregate principal amount equal to $280.0 million, on the terms and subject to the conditions set forth in a commitment letter, dated June 21, 2024 (the “Debt Commitment Letter”). The obligations of the Lenders to provide debt financing under the Debt Commitment Letter are subject to customary conditions, including, without limitation, execution and delivery of definitive documentation consistent with the Debt Commitment Letter.
Previous report
•Depreciation and amortization expense was $14.7 million for the three months ended June 30, 2024, compared to $14.7 million for the same period in 2023.
Previous report
Income Tax Expense (Benefit)
Previous report
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Previous report
•Selling, general, and administrative expenses increased from $75.2 million to $100.8 million, an increase of $25.6 million, or 34.0%, due to increased employment related costs, continued investment in our Rare Disease segment sales and marketing activities, legal expenses, expenses related to the pending acquisition of Alimera, as well as an overall increase in activities required to support the growth of our business.
Previous report
•Depreciation and amortization expense was $29.4 million for the six months ended June 30, 2024, compared to $29.4 million for the same period in 2023.
Previous report
Income Tax Expense (Benefit)
Previous report
Debt Financing
Previous report
On June 21, 2024, in connection with the pending business combination with Alimera, JPMorgan Chase Bank, N.A. and Blackstone Credit & Insurance as Lenders committed to provide debt financing for the Merger in an aggregate principal amount equal to $280.0 million, on the terms and subject to the conditions set forth in the Debt Commitment Letter. Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report on Form 10-Q for further information regarding the Merger.
Previous report
A summary of our significant accounting policies is included in Part II, Item 8. Consolidated Financial Statements, Note 1, Description of Business and Summary of Significant Accounting Policies, in our 2023 Form 10-K. Certain of our accounting policies are considered critical, as these policies require significant, difficult or complex judgments by management, often requiring the use of estimates about the effects of matters that are inherently uncertain. There have been no material changes to our critical accounting estimates since the 2023 Form 10-K.
Previous report
CONTRACTUAL OBLIGATIONS
Previous report
As of June 30, 2024, our contractual obligations have not changed materially from the amounts reported in our 2023 Form 10-K.
Reworded paragraphs (51)
Previous wording
ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, “ANI,” the “Company,” “we,” “us,” or “our”) is a diversified bio-pharmaceutical company serving patients in need by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals, including for diseases with high unmet medical need. Our team is focused on delivering sustainable growth by scaling up our Rare Disease business through the launch of our lead asset, Cortrophin Gel, strengthening our generics business with enhanced development capability, innovation in established brands and leveraging our U.S.-based manufacturing capabilities. Our three pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota, and one is located in East Windsor, New Jersey, are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. We ceased operations at our subsidiary in Oakville, Ontario, Canada as of March 31, 2023. This action was part of ongoing initiatives to capture operational synergies following our acquisition of Novitium Pharma LLC (“Novitium”) in November 2021. We have fully completed the transition of the products manufactured or packaged in Oakville to one of our three U.S. based manufacturing sites. In February 2024, our Canadian subsidiary entered into an agreement for the purchase and sale of the Oakville site, for a purchase price of $19.2 million Canadian Dollars, or approximately $14.2 million, based on the exchange rate at closing. The sale closed on March 28, 2024 (see Note 4).
Current wording
Our three pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota, and one is located in East Windsor, New Jersey, are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. We ceased operations at our subsidiary in Oakville, Ontario, Canada as of March 31, 2023. This action was part of ongoing initiatives to capture operational synergies following our acquisition of Novitium Pharma LLC (“Novitium”) in November 2021. We have fully completed the transition of the products manufactured or packaged in Oakville to one of our three U.S. based manufacturing sites. In February 2024, our Canadian subsidiary entered into an agreement for the purchase and sale of the Oakville site, for a purchase price of $19.2 million Canadian Dollars, or approximately $14.2 million, based on the exchange rate at closing. The sale closed on March 28, 2024 (see Note 4 “Restructuring Canada Operations” to the Notes to Condensed Consolidated Financial Statements).
Previous wording
On June 24 2024, we announced that we entered into a definitive agreement pursuant to which we will acquire Alimera Sciences, Inc. (“Alimera”), which is currently expected to close late during the third quarter of 2024, subject to customary closing conditions, including receipt of required regulatory approvals and approval by Alimera’s shareholders. The acquisition of Alimera is anticipated to strengthen our Rare Disease business and expand our footprint beyond the U.S. with the addition of Alimera’s direct marketing operations located in Germany, the United Kingdom, Portugal, and Ireland, as well as its partnerships in Europe, Asia, and the Middle East.
Current wording
The Alimera Acquisition is anticipated to strengthen our Rare Disease business and expand our footprint beyond the U.S. with the addition of Alimera’s direct marketing operations located in Germany, the United Kingdom, Portugal, and Ireland, as well as its partnerships in Europe, Asia, and the Middle East. ILUVIEN and YUTIQ are durable assets with high barriers to genericization which the Company believes have a clear role for patients in need of alternative therapeutic options. ANI sees the potential to unlock significant additional growth for both ILUVIEN and YUTIQ through commercial synergies and execution.
Previous wording
Throughout 2023 and the first half of 2024, we continued to build and invest in our infrastructure to support growth in new areas of opportunity, such as pulmonology, ophthalmology, and gout in the ACTH market. On October 2, 2023, we announced FDA approval and commercial availability of a 1-mLvial of Cortrophin Gel, appropriate for adjunctive treatment of certain patients with acute gouty arthritis flares. As a result of the continued investment in our Rare Disease platform, our expenditures were significantly higher during the first half of 2024 as compared to the prior year.
Current wording
We have spent significant time, effort and resources in establishing our Rare Disease platform. Throughout 2023 and 2024, we continued to build and invest in our infrastructure to support growth in new areas of opportunity, such as pulmonology, ophthalmology, and gout in the ACTH market. On October 2, 2023, we announced FDA approval and commercial availability of a 1-mLvial of Cortrophin Gel, appropriate for adjunctive treatment of certain patients with acute gouty arthritis flares. We plan to continue to invest in our Rare Disease platform.
Previous wording
We have spent significant time, effort and resources in establishing our Rare Disease platform. We acquired the NDAs for Cortrophin Gel and Cortrophin-Zinc in January 2016 and executed long-term supply agreements with a supplier of our primary raw material for corticotrophin API, a supplier of corticotrophin API with whom we have advanced the manufacture of commercial scale batches of API, and a Cortrophin Gel fill/finish contract manufacturer. During the second quarter of 2021, we submitted a Supplemental New Drug Application (“sNDA”) to the FDA.
Current wording
We acquired the NDAs for Cortrophin Gel and Cortrophin-Zinc in January 2016 and executed long-term supply agreements witha supplier of our primary raw material for corticotrophin API, a supplier of corticotrophin API with whom we have advanced the manufacture of commercial scale batches of API, and a Cortrophin Gel fill/finish contract manufacturer. On October 29, 2021, the FDA approved the Company’s sNDA for Purified Cortrophin Gel (Repository Corticotropin Injection USP) for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis (“MS”) and rheumatoid arthritis (“RA”), in addition to excess urinary protein due to nephrotic syndrome. Cortrophin Gel is an adrenocorticotropic hormone (“ACTH”), also known as purified corticotropin. On January 24, 2022, we announced the commercial launch of Cortrophin Gel in the U.S. as our foundational Rare Disease asset.
Previous wording
We plan to continue to expand our Rare Disease business, through a combination of organic growth, as described above, and acquisition. See below for expanded discussion on our pending business combination with Alimera. While we continue to execute against our strategic initiatives that we believe will result in the long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to expand our existing capabilities.
Current wording
We plan to continue to expand our Rare Disease business, through a combination of organic growth, as described above, and acquisition. See below for expanded discussion on our recently completed business combination with Alimera. While we continue to execute against our strategic initiatives that we believe will result in the long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to expand our existing capabilities.
Previous wording
We have grown our established brand product offerings through acquisition. We have acquired the NDAs for and market Atacand, Atacand HCT, Arimidex, Casodex, Lithobid, Vancocin, Inderal LA, Inderal XL, InnoPran XL, Oxistat, Veregen, and Pandel. We are innovating in our go-to-market strategy through creative partnerships.
Current wording
We have grown our established brand product offerings through acquisition. We have acquired the NDAs for and market Atacand, Atacand HCT, Arimidex, Casodex, Lithobid, Vancocin, Inderal LA, Inderal XL, InnoPran XL, Oxistat, and Veregen. We are innovating in our go-to-market strategy through creative partnerships.
Previous wording
At the effective time of the Merger (the “Effective Time”), each outstanding share of common stock, par value $0.01 per share, of Alimera, outstanding immediately prior to the Effective Time will automatically be converted into the right to receive (i) $5.50 in cash, without interest and (ii) one contingent value right (a “CVR”), which shall represent the right to receive the Milestone Payments (as defined below) subject to the terms and conditions set forth in the CVR Agreement (as defined below) (the consideration contemplated by (i) and (ii), together, the “Merger Consideration”).
Current wording
On September 16, 2024, the Company compl eted our previously announced merger with Alimera (the “Closing”). At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.01 per share, of Alimera (the “Alimera Common Stock”) outstanding immediately prior to the Effective Time including each Alimera RSA, Alimera PSU, Alimera RSU, and Alimera Warrant (as defined below), but excluding any treasury shares or shares owned by the Company, Merger Subs or any other subsidiary of the Company or Alimera), was canceled and ceased to exist and was converted into the right to receive (i) $5.50 in cash (“Closing Cash Consideration”), and (ii) 1 contingent value right (a “CVR”), which represents the right to receive the milestone payments (as defined below) subject to the terms and conditions set forth in the CVR Agreement entered into on September 16, 2024 (clauses (i) and (ii) collectively, the “Merger Consideration”). The Company also repaid $72.5 million of Alimera debt.
Previous wording
When issued, each CVR will entitle the holder (the “Holder”) to receive Milestone Payments for 2026 and 2027, upon satisfaction of the applicable Milestones. The Milestone Payments for each CVR will equal the product (rounded to the nearest 1/100 of $0.01) of $0.25 multiplied by a fraction (which is no case will exceed one), and (i) for 2026, equals the amount, if any, by which the 2026 Net Revenue exceeds $140.0 million, divided by $10.0 million (subject to adjustment for the exercise price of Eligible Options), and (ii) for 2027, equals the amount, if any, by which the 2027 Net Revenue exceeds $160.0 million, divided by $15.0 million (subject to adjustment for the exercise price of Eligible Options) (the occurrence of the events in clauses (i) and (ii), each, a “Milestone”).
Current wording
Each CVR entitles the holder to receive milestone payments for 2026 and 2027. The milestone payments for each CVR equals the product (rounded to the nearest 1/100 of$0.01) of$0.25 multiplied by a fraction (which is no case will exceed one), and (i) for 2026, equals the amount, if any, by which the 2026 Net Revenue exceeds$140.0 million, divided by$10.0 million (subject to adjustment for the exercise price of eligible options), and (ii) for 2027, equals the amount, if any, by which the 2027 Net Revenue exceeds$160.0 million, divided by$15.0 million (subject to adjustment for the exercise price of applicable Alimera Options).
Previous wording
During the three and six months ended June 30, 2024, the Company incurred approximately $3.5 million, respectively, in transaction costs related to this pending Merger Agreement, all of which were expensed.
Current wording
During the three and nine months ended September 30, 2024, the Company incurred approximately $8.8 million and $12.2 million, respectively, in transaction costs related to the Merger Agreement, all of which were expensed. See Note 3 “Business Combination” to the Notes to Condensed Consolidated Financial Statements for further information on the acquisition.
Previous wording
Impacts to our second quarter 2024 and 2023 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below.
Current wording
Impacts to our third quarter 2024 and 2023 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below.
Previous wording
We derive substantially all of our revenues from sales of generic, rare disease, and established brand pharmaceutical products, royalties on net sales of certain products, and other pharmaceutical services. Many of our established brand products as well as our generic products face competition from generic products and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brand products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.
Current wording
We derive substantially all of our revenues from sales of rare disease, generic, and established brand pharmaceutical products, royalties on net sales of certain products, and other pharmaceutical services. Many of our established brand products as well as our generic products face competition from generic products and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brand products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.
Previous wording
Net revenues for the three months ended June 30, 2024 were $138.0 million compared to $116.5 million for the same period in 2023, an increase of 18.4%, primarily as a result of the following factors:
Current wording
Net revenues for the three months ended September 30, 2024 were $148.3 million compared to $131.8 million for the same period in 2023, an increase of 12.5%, primarily as a result of the following factors:
Previous wording
•Net revenues of rare disease pharmaceutical products, which consists entirely of sales of Cortrophin Gel, were $49.2 million during the three months ended June 30, 2024, an increase of $24.9 million from $24.3 million for the same period in 2023. This increase was driven by increased volume in this third year of launch (product was launched in late January 2022).
Current wording
•Net revenues of rare disease pharmaceutical products, which include Cortrophin Gel and a partial month contribution from ILUVIEN and YUTIQ, were $56.4 million during the three months ended September 30, 2024, an increase of $26.7 million from $29.7 million for the same period in 2023. This increase was driven by increased volume in this third year of launch of Cortrophin Gel (product was launched in late January 2022), and a partial month of sales from ILUVIEN and YUTIQ, as a result of the acquisition of Alimera on September 16, 2024.
Previous wording
•Net revenues for generic pharmaceutical products were $74.0 million during the three months ended June 30, 2024, an increase of 16.8% compared to $63.3 million for the same period in 2023, driven by increased volumesand the inclusion of 2023 launches and new product launches in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Colestipol, Estradiol, Pentoxifylline, Pirfenidone, Thyroid, and various other products tempered by a decrease in revenues of Famotidine, Paliperidone, Misoprostol, and Nebivolol among others.
Current wording
•Net revenues for generic pharmaceutical products were $78.2 million during the three months ended September 30, 2024, an increase of 10.8% compared to $70.6 million for the same period in 2023, driven by increased volumesand the inclusion of 2023 launches and new product launches in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Baclofen, Candesartan, Colestipol, Estradiol, Fludrocortisone, L-Glutamine, Pentoxifylline, and various other products tempered by a decrease in revenues of Thyroid, Dapsone, Famotidine, and MAS-ER, among others.
Previous wording
•Net revenues for branded pharmaceutical products, royalties, and other pharmaceutical services were $14.9 million during the three months ended June 30, 2024, a decrease of 48.5% compared to $28.9 million for the same period in 2023, driven by a net decrease in volume. During the three months ended June 30, 2023, we benefited from supplying incremental volume in markets that were experiencing supply chain disruptions for competing products.
Current wording
•Net revenues for branded pharmaceutical products, royalties, and other pharmaceutical services were $13.7 million during the three months ended September 30, 2024, a decrease of 56.6% compared to $31.5 million for the same period in 2023, driven by a net decrease in volume. During the three months ended September 30, 2023, we benefited from supplying incremental volume in markets that were experiencing supply chain disruptions for competing products.
Previous wording
Cost of sales consists of direct labor, including manufacturing and packaging, active and inactive pharmaceutical ingredients, freight costs, packaging components, and royalties payable related to profit-sharing arrangements. Cost of sales does not include depreciation and amortization expense, which is reported as a separate component of operating expenses on our unaudited interim condensed consolidated statements of operations.
Current wording
Cost of sales consists of direct labor, including manufacturing and packaging, active and inactive pharmaceutical ingredients, freight costs, packaging components, royalties payable related to profit-sharing arrangements, and amortization of the inventory fair value step-up recognized in connection with the acquisition of Alimera. Cost of sales does not include depreciation and amortization expense, which is reported as a separate component of operating expenses on our unaudited interim condensed consolidated statements of operations.
Previous wording
For the three months ended June 30, 2024, cost of sales increased to $57.7 million from $42.3 million for the same period in 2023, an increase of $15.4 million, or 36.5%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel.
Current wording
For the three months ended September 30, 2024, cost of sales increased to $63.1 million from $48.1 million for the same period in 2023, an increase of $15.0 million, or 31.1%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products, significant growth of royalty bearing products, including Cortrophin Gel, and the amortization of the inventory step-up related to the acquisition of Alimera of approximately $3.2 million.
Previous wording
Cost of sales, as a percentage of net revenues, increased to 38.8% from 35.8% for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to a shift in product mix year over year, increase in sales volume, and increase in sales of products that bear a royalty payable.
Current wording
Cost of sales, as a percentage of net revenues, increased to 42.5% from 36.5% for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a shift in product mix year over year, increase in sales of products that bear a royalty payable, and the amortization of Alimera inventory step-up.
Previous wording
During the six months ended June 30, 2024, approximately 24% of our raw material purchases were from one supplier. During the six months ended June 30, 2023, no single vendor represented more than 10% of our raw material inventory purchases.
Current wording
During the three months ended September 30, 2024 and September 30, 2023, no single vendor represented more than 10% of our raw material inventory purchases.
Previous wording
For the three months ended June 30, 2024, other operating expenses, net increased to $75.2 million from $61.9 million for the same period in 2023, an increase of $13.3 million, or 21.5%, primarily as a result of the following factors:
Current wording
For the three months ended September 30, 2024, other operating expenses, net increased to $105.8 million from $65.8 million for the same period in 2023, an increase of $40.0 million, or 60.8%, primarily as a result of the following factors:
Previous wording
•Research and develo pment expenses decreased from $7.4 million to $7.3 million, a nominal decrease of approximately $0.1 million or 1.1% when comparing the three months ended June 30, 2024 to the same period in 2023.
Current wording
•Research and develo pment expenses decreased from $11.1 million to $10.1 million, a nominal decrease of approximately $1.0 million or 8.9% when comparing the three months ended September 30, 2024 to the same period in 2023.
Previous wording
•We recognized losses of $0.4 million and $1.0 million in the three months ended June 30, 2024 and 2023, respectively, for the contingent consideration fair value adjustment. The change in the fair value adjustment during the three months ended June 30, 2024 is primarily related to changes in the anticipated timing of cash flows (i.e., moving closer to the anticipated payment dates of the consideration for the third milestone in connection with the acquisition of Novitium). Additionally, the fair value measurement adjustment in the three months ended June 30, 2024 is related to only the third milestone, whereas the fair value adjustment at June 30, 2023 related to all three milestones.
Current wording
•We recognized a loss of $0.8 million and gain of $2.6 million in the three months ended September 30, 2024 and 2023, respectively, for the contingent consideration fair value adjustment. The change in the fair value adjustment during the three months ended September 30, 2024 is primarily related to changes in the anticipated timing of cash flows (i.e., moving closer to the anticipated payment dates of the consideration for the third milestone in connection with the acquisition of Novitium) and decrease in discount rates. Additionally, the fair value measurement adjustment in the three months ended September 30, 2024 is related to only the third milestone, whereas the fair value adjustment at September 30, 2023 related to all three milestones.
Previous wording
For the three months ended June 30, 2024, we recognized total other expense of $7.5 million as compared to total other expense of $7.2 million for the same period in 2023, an increase of $0.3 million.
Current wording
For the three months ended September 30, 2024, we recognized total other expense of $11.0 million as compared to total other expense of $6.4 million for the same period in 2023, an increase of $4.5 million.
Previous wording
•We recorded an unrealized loss on our investment in equity securities held in CG Oncology of approximately $2.7 million is due to the mark to market to fair value of equity securities as of the balance sheet date. Therewas no comparable loss on investment in the three months ended June 30, 2023.
Current wording
•We recorded an unrealized gain on our investment in equity securities held in CG Oncology of approximately $1.4 million is due to the mark to market to fair value of equity securities as of the balance sheet date. There was no comparable gain on investment in the three months ended September 30, 2023.
Previous wording
•Interest expense, net for the three months ended June 30, 2024 consists primarily of interest expense on borrowings under our Term Facility of approximately $8.5 million and amortization of deferred debt issuance costs of approximately $0.6 million, offset by dividend income earned on our money market funds and interest earned on our cash balances of approximately $2.6 million, the effects of the interest rate swap of approximately $1.6 million, and interest capitalized into construction in progress. The decrease in interest expense is primarily related to the increase in the dividend income and interest income earned on our larger cash balances during the current period, as interest expense on borrowing under our Term Facility and amortization of deferred debt issuance costs are consistent with the three months ended June 30, 2023.
Current wording
•Interest expense, net for the three months ended September 30, 2024 consists primarily of interest expense on borrowings under our Term Facility of approximately $4.0 million and amortization of deferred debt issuance costs of approximately $0.3 million, and interest expense on the New Credit Facility of approximately $1.1 million and Convertible Senior Notes of approximately $1.0 million, offset by dividend income earned on our money market funds and interest earned on our cash balances of approximately $2.6 million, the effects of the interest rate swap of approximately $1.7 million, and interest capitalized into construction in progress. The decrease in interest expense is primarily related to the increase in the dividend income and interest income earned on our larger average cash balances during the current period, interest income realized on our interest rate swaps, and the inclusion of approximately only one and a half months of Term Facility interest in the current three months ended September 30, 2024 as compared to three full months in September 30, 2023 due to the timing of the extinguishment of the Term Facility (August 13, 2024) and the draw down of the New Credit Facility (September 16, 2024).
Previous wording
For the three months ended June 30, 2024, we recognized an income tax expense of approximately $0.0 million. The Company’s effective tax rate was 0.0% after discrete items for the three months ended June 30, 2024. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes, stock based compensation, and non-deductible expenses related to the pending business combination which were treated as a discrete item during the quarter which affects the estimated tax rate.
Current wording
For the three months ended September 30, 2024, we recognized an income tax benefit of approximately $7.3 million. The Company’s effective tax rate was 23.3% after discrete items for the three months ended September 30, 2024. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes, treatment of discrete items (including stock based compensation), and non-deductible expenses related to the completed acquisition of Alimera which were treated as a discrete item during the quarter which affects the estimated tax rate.
Previous wording
For the three months ended June 30, 2023, we recognized an income tax benefit of $1.0 million. The income tax expense resulted from applying an estimated annual worldwide effective tax rate of (19.0)% to pre-tax consolidated income of $5.2 million reported during the period. There were no material discrete items occurring during the three months ended June 30, 2023.
Current wording
For the three months ended September 30, 2023, we recognized an income tax expense of $1.6 million. The income tax expense resulted from applying an estimated annual worldwide effective tax rate of 13.6% to pre-tax consolidated income of $11.5 million reported during the period. The effective tax rate differed from the federal statutory rate of 21% prim arily due to the recognition of the U.S. federal research and development credit, permanent differences, and stock based compensation.
Previous wording
Net revenues for thesix months ended June 30, 2024 were$275.5 million compared to$223.3 million for the same period in 2023, an increase of 23.3%, primarily as a result of the following factors:
Current wording
Net revenues for thenine months ended September 30, 2024 were$423.8 million compared to$355.2 million for the same period in 2023, an increase of 19.3%, primarily as a result of the following factors:
Previous wording
•Net revenues of rare disease pharmaceutical products, which consists entirely of sales of Cortrophin Gel, were $86.1 million during the six months ended June 30, 2024, an increase of $45.5 million from $40.6 million for the same period in 2023. This increase was driven by increased volume in this third year of launch (product was launched in late January 2022).
Current wording
•Net revenues of rare disease pharmaceutical products, which include Cortrophin Gel and a partial month of contribution from ILUVIEN and YUTIQ, were $142.6 million during the nine months ended September 30, 2024, an increase of $72.2 million from $70.4 million for the same period in 2023. This increase was driven by increased volume in this third year of launch of Cortrophin Gel (product was launched in late January 2022), and a partial month of sales from ILUVIEN and YUTIQ, as a result of the acquisition of Alimera on September 16, 2024.
Previous wording
•Net revenues for generic pharmaceutical products were $144.2 million duringthesix months ended June 30, 2024, an increase of 13.5% compared to$127.0 million for the same period in 2023, driven by increased volumes and the inclusion of 2023 launches and new product launches in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Colestipol, Estradiol,Lacosamide, Nitrofurantoin, Pentoxifylline, Pirfenidone, Prednisone, Tranexamic Acid, and various other products tempered by a decrease in revenues of Famotidine, Meloxicam, Nebivolol, Paliperidone, and Prochlorperazine among others.
Current wording
•Net revenues for generic pharmaceutical products were $222.4 million duringthe nine months ended September 30, 2024, an increase of 12.5% compared to$197.6 million for the same period in 2023, driven by increased volumes and the inclusion of 2023 launches and new product launches in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Baclofen, Candesartan, Colestipol, Estradiol,Lacosamide, Nitrofurantoin, Pentoxifylline, Pirfenidone, Prednisone, Vancomycin, and various other products tempered by a decrease in revenues of Dapsone, Famotidine, Meloxicam, Nebivolol, Paliperidone, Prochlorperazine, Thyroid, and Vancomycin OS among others.
Previous wording
•Net revenues for branded pharmaceutical products, royalties, and other pharmaceutical services were $45.2 million during the six months ended June 30, 2024, a decrease of 18.9% compared to $55.7 million for the same period in 2023, driven by a net decrease in volume. During the first quarter of 2024, we were successful in supplying incremental volume in markets that were experiencing supply chain disruptions for competing products, which did not continue into the second quarter of 2024.
Current wording
•Net revenues for branded pharmaceutical products, royalties, and other pharmaceutical services were $58.8 million during the nine months ended September 30, 2024, a decrease of 32.5% compared to $87.2 million for the same period in 2023, driven by a net decrease in volume. During portions of the prior year and the first quarter of 2024, we were successful in supplying incremental volume in markets that were experiencing supply chain disruptions for competing products, which did not continue into the second and third quarter of 2024.
Previous wording
For the six months ended June 30, 2024, cost of sales increased to $106.9 million from $80.0 million for the same period in 2023, an increase of $26.9 million, or 33.6%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel.
Current wording
For the nine months ended September 30, 2024, cost of sales increased to $169.9 million from $128.1 million for the same period in 2023, an increase of $41.8 million, or 32.7%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products, significant growth of royalty bearing products, including Cortrophin Gel, and the amortization of the inventory step-up related to the acquisition of Alimera of approximately $3.2 million.
Previous wording
Cost of sales, as a percentage of net revenues, increased to 41.8% from 36.3% for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to a shift in product mix year over year, increase in sales volume, and increase in sales of products that bear a royalty payable.
Current wording
Cost of sales, as a percentage of net revenues, increased to 40.1% from 36.1% for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to a shift in product mix year over year, and increase in sales of products that bear a royalty payable.
Previous wording
During the three months ended June 30, 2024, approximately 27% of our raw material purchases were from one supplier. During the three months ended June 30, 2023, no single vendor represented more than 10% of our raw material inventory purchases.
Current wording
During the nine months ended September 30, 2024, approximately 17% of our raw material purchases were from one supplier. During the nine months ended September 30, 2023, no single vendor represented more than 10% of our raw material inventory purchases.
Previous wording
For the six months ended June 30, 2024, other operating expenses, net increased to$143.1 million from$121.0 million for the same period in 2023, an increase of$22.1 million, or 18.2%, primarily as a result of the following factors:
Current wording
For the nine months ended September 30, 2024, other operating expenses, net increased to$248.9 million from$186.8 million for the same period in 2023, an increase of$62.1 million, or 33.2%, primarily as a result of the following factors:
Previous wording
•Research and development expenses increased from $13.3 million to $17.8 million, an increase of $4.5 million or 33.9%, primarily due to a higher level of activity associated with ongoing and new projects in the six months ended June 30, 2024.
Current wording
•Research and development expenses increased from $24.4 million to $27.9 million, an increase of $3.5 million or 14.4%, primarily due to a higher level of activity associated with ongoing and new projects in the nine months ended September 30, 2024.
Previous wording
•Selling, general, and administrative expenses increased from $38.8 million to $52.8 million, an increase of $14.1 million, or 36.3%, due to increased employment related costs, continued investment in our Rare Disease segment sales and marketing activities, legal expenses, expenses related to the pending acquisition of Alimera, as well as an overall increase in activities required to support the growth of our business.
Current wording
•Selling, general, and administrative expenses increased from $117.2 million to $179.9 million, an increase of$62.7 million, or 53.5%, due to increased employment related costs, investment in Rare Disease sales and marketing infrastructure and activities, legal expenses, transaction and integration expenses related to the acquisition of Alimera of approximately $13.5 million, severance expense of approximately $5.3 million and the settlement of all outstanding equity awards held by Alimera employees of approximately $9.2 million, and an overall increase in activities to support revenue growth.
Previous wording
•We recognized losses of $0.4 million and $2.0 million in the six months ended June 30, 2024 and 2023, respectively, for the contingent consideration fair value adjustment. The change in the fair value adjustment during the six months ended June 30, 2024 is primarily related to changes in the anticipated timing of cash flows (i.e., moving closer to the anticipated payment dates of the consideration for the third milestone in connection with the acquisition of Novitium) and fluctuations in the discount rates, offset by adjustments recorded upon payment of the Gross Profit Earn-Out during the first quarter. Additionally, the fair value measurement adjustment in the six months ended June 30, 2024 is related to only the third milestone, whereas the fair value adjustment at June 30, 2023 related to all three milestones.
Current wording
•We recognized a loss of $1.3 million and a gain of$0.6 million in the nine months ended September 30, 2024 and 2023, respectively, for the contingent consideration fair value adjustment. The change in the fair value adjustment during the nine months ended September 30, 2024 is primarily related to changes in the anticipated timing of cash flows (i.e., moving closer to the anticipated payment dates of the consideration for the third milestone in connection with the acquisition of Novitium) and fluctuations in the discount rates, offset by adjustments recorded upon payment of the Gross Profit Earn-Out during the first quarter. Additionally, the fair value measurement adjustment in the nine months ended September 30, 2024 is related to only the third milestone, whereas the fair value adjustment at September 30, 2023 related to all three milestones.
Previous wording
•We recognized restructuring activities expenses of $1.1 million in the six months ended June 30, 2023. In 2023 costs included severance and other employee benefits costs of $0.2 million, $0.7 million of accelerated depreciation costs and $0.2 million for other miscellaneous costs accrued in 2022. There were no restructuring expenses recognized in the six months ended June 30, 2024.
Current wording
•We recognized restructuring activities expenses of $1.1 million in the nine months ended September 30, 2023. In 2023 costs included severance and other employee benefits costs of $0.2 million, $0.7 million of accelerated depreciation costs and $0.2 million for other miscellaneous costs accrued in 2022. There were no restructuring expenses recognized in the nine months ended September 30, 2024.
Previous wording
•We recognized a gain related to the sale of the former Oakville, Ontario manufacturing site of approximately $5.3 million during the six months ended June 30, 2024. There was no comparable sale in the six months ended June 30, 2023.
Current wording
•We recognized a gain related to the sale of the former Oakville, Ontario manufacturing site of approximately $5.3 million during the nine months ended September 30, 2024. There was no comparable sale in the nine months ended September 30, 2023.
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
For the nine months ended September 30, 2023, we recognized an income tax expense of$1.3 million. The income tax expense resulted from applying an estimated annual worldwide effective tax rate of 6.9% to pre-tax consolidated income of$18.9 million reported during the period. The effective tax rate differed from the federal statutory rate of 21% primarily due to the recognition of the U.S. federal research and development credit, permanent differences, and stock based compensation.
Current report — wording carried from elsewhere
On August 13, 2024, the Company, as lead borrower, entered into a delayed-draw credit agreement (the “New Credit Agreement”) with JPMorgan Chase Bank, N.A., and other financial institutions (together, the “Lenders”), which provides for aggregate principal commitments consisting of (i) a senior secured term loan facility in an aggregate principal amount of $325.0 million (the “Term Loan A” or “TLA”), and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $75.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the “TLA Revolver” and together with the TLA, the “New Credit Facility”).
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On October 29, 2021, the FDA approved the Company’s sNDA for Purified Cortrophin Gel (Repository Corticotropin Injection USP) for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis (“MS”) and rheumatoid arthritis (“RA”), in addition to excess urinary protein due to nephrotic syndrome. Cortrophin Gel is an adrenocorticotropic hormone (“ACTH”), also known as purified corticotropin.
Previous report — wording carried elsewhere
For the six months ended June 30, 2023, we recognized an income tax benefit of$0.3 million. The income tax expense resulted from applying an estimated annual worldwide effective tax rate of(3.7)% to pre-tax consolidated income of$7.4 million reported during the period. There were no material discrete items occurring during the six months ended June 30, 2023.