ANI Pharmaceuticals (ANIP)

[Just the facts maam]

Regarding the convertible notes are good and bad depending on how they are used.

I now understand why the short interest rises significantly following the issuance of convertible notes. The note holder shorts the stock for the same number of shares that can be converted. ANIP gets $316.25 million offering at 2.25% works out to approximately $7.12 million in interest. Hypothetically if they could short the 4,267,305 shares for a full conversion of notes at $60, it would make cash outlay of $60,211,678 for the notes generating a return of 11.82% on this cash outlay. The trick is to ensure the note holder do not short more shares than it can convert.

As for ANIP's strategy:

It all depends on who is holding the convertible notes. If the holder is unaware of a potential buyout, they may legitimately expect to keep getting their 11.82% return on the portion of the notes they were able to short.

If, on the other hand, the partner now owns the notes, it might be cost effective way to transfer shares to partner company as they take an equity stake in ANIP. Especially, if they are eyeing a future buyout.

As for Friday's high volume, many other pharmas saw high volumes at close and after hours on Friday. It may be in response to the Federal Reserve's interest rate cut announcement.

[silvr_surfr]

Thanks for the research on the convertible notes. I have to admit, I still do not understand them. I found an article about them that tried to "demystify" them over 27 pages. Did not help. I hope we do start seeing share price appreciation as you suggest. Another high volume day today - after the 1M shares traded on Friday too. Seems like something is ready to break.

[silvr_surfr]

Thanks JTFM. This is a strange addition. I hope it stands "Head & Shoulders" above the competition (ha ha). The only angle I can see is maybe we will be the only U.S. supplier. I can't believe the market size even justifies a clinical trial. If we could get an announcement, maybe we could know more.

[Just the facts maam]

ANIP is sitting ion another ANDA approval. On September 16, 2024 Novitium gained approval for Ketoconazole 2% topical shampoo. One they had to conduct a phase three study comparing it to Perrigo's version of the drug.

Phase 3 trial

Approval

[Just the facts maam]

In 2014, ANIP issued $143.75 million in senior convertible notes due in 2019. ANIP was trading around $53. Conversion price was $69.48 and they took a hedge with a strike price of $96.21. The increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change went to $205.

Interesting that in the current senior convertible notes the increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change goes up to $400, almost double the 2014 notes.

[Just the facts maam]

I believe the SECs expanded definitions of “accredited investor” and “qualified institutional buyer” would make way for a partnering company to acquire the senior convertible notes. The SEC added LLCs to the list, so long as the entity meet the $100 million in securities owned and invested threshold. Not a difficult threshold for the investment arm of a large pharma.

As I understand it, if ANIP's partner owns the notes, and wants to convert them as soon as possible, starting October 1, 2024, it is in their interest to have ANIP trading above and as close to $96.34 (130 % of the strike price for the notes) for 20 consecutive days. The partner could then convert the notes, while minimizing tax hit. ANIP's cap call transaction offsets dilution up to a PPS of $114.02.

If this is the scenario playing out, look for sustained PPS between $96.34 and $114.02, up until the shares are converted. Where a partnership announcement will be made prior to the SEC beneficial ownership report is submitted. Maybe, this is where the Tezruly announcement comes into play to help elevate PPS.

Just spit-balling here.

[Just the facts maam]

Silvr here is the link to the trial involving Libigel led by Dr. Susan Davis.

Phase 2 trial

Davis and company authored "Transdermal testosterone improves verbal learning and memory in postmenopausal women not on oestrogen therapy"

Objective: The aim of this study was to examine the effects of testosterone on verbal learning and memory in postmenopausal women.

Conclusions: The small but statistically significant effect of testosterone treatment on verbal learning and memory in postmenopausal women provides the basis for further clinical trials.

Trial results publication

Real World evidence studies supporting additional indications would be great and much more cost effective.

[silvr_surfr]

Which Phase 2 trial are you referring to? FDA also has a new Real World Evidence procedure for approving drugs based on its actual use. Maybe this is also a possibility based on the multitude of scripts already written and controlled studies like the one I shared.

[Just the facts maam]

Delay in making any meaningful announcement may be timed to gaining approval of the partnered NDA.

[Just the facts maam]

Thanks Silvr, ANIP and their partner already have Phase 2 trial results supporting going to Phase 3 trial.

[silvr_surfr]

Just a matter of time...

Real World Testosterone Use

[silvr_surfr]

Thank you JTFM. Sure is strange. Princeton Junction has a train station which is within "walking distance" to the Alexander Park building so maybe it is close enough. If you look at pharmaceutical companies in the area you get dizzy real fast since there are so many. Good choice for a location from a talent standpoint. Baudette was a challenge for this.

Still does not make sense why they are being so quiet about it, particularly now that the Alimera deal closed.

[Just the facts maam]

ANIP has also posted positions for Senior Accountant and Senior Accountant - Inventory at their Princeton Junction location.

Odd that they have just indicated the 500 Alexander Park, Princeton, NJ as their Commercial HQ, yet are not housing these positions there.

[Just the facts maam]

Large volume at close including one transaction involving 567,800 shares.

ANIP also posted jobs for an accounts payable specialist, a contracts and government pricing associate and a financial planning and analysis analyst for Princeton Junction.

I find it odd that they are not located at ANIP's Commercial HQ at 500 Alexander Park, Princeton.

[Just the facts maam]

Thanks auh2oman.

[auh2oman]

From ROI-NJ ...


Princeton-based ANI Pharmaceuticals completes acquisition of Alimera Sciences

ByTom Bergeron(Princeton) -September 18, 2024

Princeton-based ANI Pharmaceuticals, a diversified biopharmaceutical company that develops, manufactures and markets high-quality branded and generic prescription pharmaceutical products for diseases with high unmet medical need, on Tuesday announced the completion of its previously announced acquisition of Alimera Sciences.

Alimera Sciences is based in Alpharetta, Georgia.

“Today marks a major milestone in our strategy to expand our Rare Disease business and deliver on our purpose of ‘Serving Patients, Improving Lives,’” CEO Nikhil Lalwani said. “Alimera is highly synergistic to our Rare Disease business, and we believe our proven commercial execution capabilities can further unlock the value of ILUVIEN and YUTIQ, two growing and durable assets, as well as accelerate the growth of Cortrophin Gel in ophthalmology.”

Lalwani said the acquisition will have a big impact.

“We continue to expect the transaction to create substantial shareholder value and generate high single-digit to low double-digit accretion in 2025 adjusted non-GAAP EPS with substantially higher accretion thereafter,” he said.

“With this acquisition, ANI now has three commercial rare disease assets, an expanded global footprint and a robust Rare Disease team covering the specialties of ophthalmology, neurology, nephrology, rheumatology and pulmonology. I want to thank the employees of both companies and our advisers for their cooperation and diligence in closing this transformational transaction. We are thrilled to welcome Alimera to the ANI team.”

ANI said the transaction does the following:

Solidifies Rare Disease segment as the largest driver of future growth:The combination with Alimera creates an attractive Rare Disease growth platform, adding approximately $105 million in 2024 revenue on a pro forma basis and expanding the Rare Disease segment to approximately 45% of pro forma 2024 revenues. The transaction also expands ANI’s footprint beyond the U.S. to 20 countries in Europe and beyond.
Adds two durable commercial products with significant growth potential: 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.
Expands foothold in ophthalmology:During the first quarter, 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 to over 3,600 physicians. The company estimates that there is over 50% overlap between high potential prescribers of Cortrophin Gel, ILUVIEN and YUTIQ.
Offers potential for substantial shareholder value creation: ANI continues to expect high single-digit to low double-digit accretion in 2025 adjusted non-Generally Accepted Accounting Principles Earnings Per Share with substantial accretion thereafter. The transaction is anticipated to deliver an additional $35-$38 million in 2025 adjusted non-GAAP Earnings Before Interest, Taxes, Depreciation and Amortization, inclusive of approximately $10 million in identified cost synergies with additional EBITDA contribution expected from accelerated growth of Cortrophin Gel within ophthalmology.

https://www.roi-nj.com/2024/09/18/healthcare/princeton-based-ani-pharmaceuticals-completes-acquisition-of-alimera-sciences/

[Just the facts maam]

Sr Convertible Notes may start getting converted when ANIP trades at or above $96.34 for 20 consecutive days after September 30, 2024. The following is from ANIP's filing.

Generally. Subject to ?Section 5.01(C)(ii), a Note may be Converted only in the following circumstances:
(1) Conversion Upon Satisfaction of Common Stock Sale Price Condition. Before the Close of Business on the Business Day immediately before June 1, 2029, a Holder may Convert its Notes 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 Common Stock exceeds one hundred and thirty percent (130%) of the Conversion Price for each of at least twenty (20) Trading Days (whether or not consecutive) during the thirty (30) consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter.

I wonder if this how the partner starts accumulating shares.

[Just the facts maam]

Thanks auh2oman.

[Just the facts maam]

Silvr, keeping their website up to date was never ANIP's forte. The 2023 annual report says the CVR's expired.

[auh2oman]

Another Upgrade ...

ANI Pharmaceuticals price target raised to $83 from $81 at Raymond James

Raymond James analyst Gary Nachman raised the firm’s price target on ANI Pharmaceuticals to $83 from $81 and keeps an Outperform rating on the shares. ANI Pharmaceutials closed the acquisition of Alimera Sciences this week, and Raymond James sees good value from the deal, the analyst tells investors in a research note. The firm likes that the deal is expanding ANI’s Rare Disease franchise with Iluvien/Yutiq, and that stronger ophthalmology presence will also benefit Cortrophin and should accelerate its growth in that segment.


https://www.tipranks.com/news/the-fly/ani-pharmaceuticals-price-target-raised-to-83-from-81-at-raymond-james

[silvr_surfr]

JTFM, Jere's an off-the-wall question. Why do the Libigel CVRs still show up in the ANIP FAQs? Mine were removed from my account, but are they still in play?

[Just the facts maam]

Thanks Silvr. Good PR prior to an approval announcement.

[silvr_surfr]

Hey JTFM. Looks like the female testosterone PR campaign is in full swing behind Kate Winslet. If you just do a google search you will see many hits from US publications, but also India and UK (could be others).

Kate Winslet PR

I think this is a bullish sign that we will get an announcement soon. Global reach would suggest a global partner.

[Jp2011]

Thank you very much.

[Just the facts maam]

Jp2011, in ANIP's Q3 2023 earnings press release they stated that two 505(b)(2) NDAs were submitted to the FDA. They never provided any details on what the drugs were or for what indications.

Company’s strong R&D organization delivered five new product launches and filed three new ANDAs and two new 505(b)(2) applications in the quarter; retained number two ranking in Competitive Generic Therapy (CGT) approvals

When looking at their 10 Q filing for that quarter under Other Operating Expenses they showed the following:

For the three months ended September 30, 2023, other operating expenses increased to $65.8 million from $55.9 million for the same period in 2022, an increase of $9.9 million, or 17.6%, primarily as a result of the following factors:

• Research and development expenses increased from $7.7 million to $11.1 million, an increase of $3.5 million or 45.2%, primarily due to expenses
related to a 505(b)(2) filing for one product of approximately $1.6 million, and a higher level of activity associated with ongoing and new projects in the three months ended September 30, 2023.

Process of elimination points to the second NDA being filed by ANIP but paid for by another party, most likely their undisclosed partner.

The NDA they paid for is for Tezruly approved July 29, 2024 for ANIP has yet to announce.

I believe the partnered NDA relates to Libigel (female testosterone) as on October 27, 2021 they filed a Certification request to delay submitting results for the large 3,656 participant. Certifications are used when an NDA has been or will be submitted. The partner likely paid for this submission. Had ANIP paid the fee, it would disclose that ANIP paid the larger $3.2 million submission fee associated with the FDA reviewing clinical trial vs the $1.6 million fee where clinical trial data is not reviewed. This would confirm that ANIP had filed an NDA for Libigel, the first FDA approved testosterone drug for women. A blockbuster drug just by replacing off label and compounded testosterone already being prescribed.

The reason I say a decision is due within the two weeks, assumes that there was no problems with the filing and the FDA is meeting its review target timeline. The PDUFA date was not provided for Tezruly, and it was not provided for the partnered drug. Which is indicative of ANIP being bought out or the partner taking an equity stake in ANIP upon approval or shortly afterwards.

JMHO

[Jp2011]

JTFM, I cannot find the NDA you are referring to. Can you please show me where to find it? Also, how do we know there is a partner for this? And do we have any concrete indication for what it is for? Thank you

[Just the facts maam]

Two weeks or less to the FDA decision on the partnered NDA, assuming there were no delays.

I think naked shorts are exiting and the short interest remaining will mostly be tied to the Convertible note offering and those playing both sides of the paint. Those with the notes obviously shorted the stock to minimize their outlay for the offering. It should be equal to the number of shares they expect to get from the conversion.

[Just the facts maam]

Thanks Silvr, so it looks like the ALIM acquisition fits into both AbbVie's and Merck's expansion plans.

[silvr_surfr]

Thanks JTFM. Abbvie is doing a deal with Ripple Therapeutics for implantable drugs for the eye. Hmm, where have we heard that before? More evidence of a potential buyout by them.

Ripple Therapeutics

[Just the facts maam]

Looks like Guggenheim got off the sidelines and raised ANIP price target to $83 from $77 (issued April 23, 2024).

Updated rating

[bagel123]

we will be lucky to finish up for the day knowing ANIP. $+8.5 premarket. we could be bought out at $90 and we would still go down. HC & Truist suck as well. Such a shame this stock seems sooo undervalued and just won't go up!!!!!

[Just the facts maam]

Thanks auh2oman, with BS estimates like Truist's L. Sulewski, you can see why he only rates one star, which may be overrated, in my opinion.

Marketbeat Ratings

[auh2oman]

Going to be an Interesting Day ...

Here's a report released this morning that reiterates the $ 94 price target from H.C. Wainwright:
In a report released today, Oren Livnat from H.C. Wainwright reiterated a Buy rating on ANI Pharmaceuticals (ANIP – Research Report), with a price target of $94.00.

Oren Livnat has given his Buy rating due to a combination of factors including the recent acquisition of Alimera Sciences by ANI Pharmaceuticals, which is expected to be immediately accretive to the company. The acquisition enhances ANI’s rare disease portfolio with a global ophthalmology franchise that should leverage ANI’s existing commercial infrastructure. Moreover, the acquisition of Alimera introduces two long-duration steroid intravitreal implants that are projected to contribute significantly to ANI’s revenue, with pro forma sales estimated around $105 million for the year 2024. Additionally, the expected adjusted EBITDA accretion from the acquisition, including cost synergies, further supports the optimistic outlook on the stock.
Moreover, the report indicates that ANI has continued to see momentum in its Cortrophin Gel product, with a record number of new patient starts, which adds confidence to the projected revenues for 2024 being conservative. ANI’s restructuring of its capital, which includes a new term loan with more favorable interest rates and the retirement of its higher-cost debt, suggests a more efficient capital structure post-acquisition. Despite a warning letter issued to Alimera’s third-party manufacturer by the FDA, Livnat expresses confidence in ANI’s ability to address the manufacturing issues, citing ANI’s stellar track record and core competency in manufacturing. This, in conjunction with the expected guidance update from the consolidated company, reinforces the Buy rating and the $94 target price.

https://www.tipranks.com/news/blurbs/ani-pharmaceuticals-acquisition-of-alimera-sciences-bolsters-buy-rating-and-94-target-price?utm_source=edition.cnn.com&utm_medium=referral

[Just the facts maam]

ANIP trading at between $64.32 and $65.49 premarket on very few shares, but is reflective of ANIP's current market cap + ALIM's market cap prior to merger announcement. Hopefully the start of the climb back to reasonable valuations.

[Roddy4]

Another orribile day! Something is wrong with this stock..

[Just the facts maam]

ANIP will update guidance with Q3 results. Should be Q3 estimates with record number of new patient starts for Corti.

[SparklingDruid26]

https://finance.yahoo.com/news/ani-pharmaceuticals-inc-completes-acquisition-125300287.html

[Easka]

Btw Nice finish at the bell...up over $1.00 in the last 15 minutes, thanks to some big buys!

[Easka]

JTFM, couldn’t agree more, my first thought when I read about their downgrade…This doesn’t smell right! Maybe they should change the name of their firm to; Truist to Themselves?

[Just the facts maam]

After Hours trading has moved back to normal levels with less than 3500 shares at the time of this post. We have seen in excess of 50,000 shares daily for several weeks. Hopefully the games are over and PPS can start an uninterrupted climb.

[Just the facts maam]

I find Truist's motive suspect, as their last estimate of $80 was issued March 1st, 2024. No updates since then until the recent downgrade. Whereas, H.C. Wainwright raised it to more times based on news coming out and now has a $94 price target. It is almost like they are in cahoots with hedge funds intentionally trying to depress ANIP PPS.

Analyst Ratings

[silvr_surfr]

Wow, that is incredible. I have been waiting to see what it was. Now we know why we have had a week-long drop. No idea where these shares come from in such a short time. Didn't they open the door with the convertible notes? We had the lowest short shares before all of this. Good idea for the dividend.

[Just the facts maam]

Short interest as of August 30th, was 2.42 million shares. Where the hell are the shares coming from? If ANIP ever disclosed everything they have on deck, the short squeeze would be historical.

ANIP could easily screw all shorts by announcing that part of the interest savings from the Sr Convertible Note offering will be used to start issuing dividends.

[silvr_surfr]

I was thinking the same thing. That is quite the haircut, particularly based on speculation only. Makes you wonder if they have not been playing for the other side to take advantage of the situation. I sure hope they did not botch the due diligence (was there even a site visit of the old and new Eyepoint manufacturing sites?). We are owed an answer for what happened so we can trust the merger will achieve its targets. We should not have to wait until the next conference call.

[Just the facts maam]

Silvr, auh2oman, part of me feels that Truist is being disingenuous. An authentic analyst would know that Tezruly has been approved and that it is patent protected until 2041. ANIP management had meetings with Truist in June and we still do not know what these meeting were about.

If they are genuine and the deal is back on, they should up the price target to at least $75. $60 was excessive, and questionable at best. Failure to so, makes their analysis suspect.

JMHO

[Just the facts maam]

Thanks Silvr

[Just the facts maam]

Thanks Brusselsspirit.

[silvr_surfr]

Well, some good news is the the judge in the CGON patent litigation approved the "ORDER FOR THE PRODUCTION AND EXCHANGE OF CONFIDENTIAL AND HIGHLY CONFIDENTIAL INFORMATION".

[silvr_surfr]

Thanks auh2oman. If they lost the confidence from their buddies at Truist, this is horrible. Gonna be another bad day.

[auh2oman]

ANI Pharmaceuticals downgraded to Hold from Buy at Truist ...

Let's see if the following in warranted in a couple of weeks:

Truist analyst Les Sulewski downgraded ANI Pharmaceuticals (ANIP) to Hold from Buy with a price target of $60, down from $80. Closure delays of the Alimera Sciences (ALIM) acquisition imply potential post due diligence issues, likely on manufacturing deficiencies of Yutiq, the analyst tells investors in a research note. The firm now sees increased execution risk if and when the deal closes and questions whether the $381M price tag justifies its initial peak sales forecast of $220M by 2030. Truist removed Alimera from its model and plans to “reassess at an appropriate time.”

https://www.tipranks.com/news/the-fly/ani-pharmaceuticals-downgraded-to-hold-from-buy-at-truist