ANI Pharmaceuticals (ANIP) Q1 2025: Rare Disease Revenue Jumps 87% as Cortrophin Gel Expands Market Reach

May 9, 2025 | By EarningsIQ Research

Rare disease momentum and generics outperformance drove record Q1 for ANI Pharmaceuticals, as Cortrophin Gel accelerated new patient growth and generics benefited from exclusivity launches. Retina access headwinds and salesforce turnover weighed on ophthalmology, but management reaffirmed guidance on early Q2 recovery signals. Investors should watch margin mix, execution on retina recovery, and the evolving U.S. pharma tariff landscape as key levers for the remainder of 2025.

Summary

• Rare Disease Franchise Drives Growth: Cortrophin Gel delivered record new patient starts and expanded prescriber base, anchoring the quarter’s upside.
• Generics Surged on New Launches: First-to-market exclusivity and robust base execution propelled generics revenue to all-time highs.
• Retina Recovery Remains a Watchpoint: Access challenges and salesforce turnover pressured ophthalmology, but April demand rebound supports maintained full-year guidance.

Performance Analysis

ANI Pharmaceuticals delivered a record first quarter, with total revenue up sharply year-over-year, propelled by rare disease and generics outperformance. Rare disease revenue nearly doubled, fueled by Cortrophin Gel’s 43% growth and a record number of new patient starts across targeted specialties, including urology, nephrology, rheumatology, ophthalmology, and pulmonology. Notably, 40% of Cortrophin prescribers were new to the ACTH (adrenocorticotropic hormone, a hormone therapy class) category, underscoring the product’s reach into previously untapped segments.

Generics revenue set a new high, driven by new launches such as Prucalipride (GI prokinetic, launched with 180-day exclusivity) and strong base business execution. The brands portfolio contributed steady performance, though management expects normalization in Q2 as periodic demand spikes subside. Gross margin was pressured by mix and higher royalty-bearing product sales, with non-GAAP gross margin declining approximately 130 basis points year-over-year. Operating expenses rose on expanded sales teams and rare disease marketing, reflecting the company’s investment in future growth.

• Rare Disease Expansion: Cortrophin Gel’s new pre-filled syringe and expanded commercial team drove volume and prescriber growth.
• Generics Outperformance: Prucalipride exclusivity and disciplined launch execution led to outsized Q1 generics revenue.
• Retina Drag: Illuvian and Utique revenues were hampered by Medicare access issues and salesforce transition, though April demand nearly recovered to Q4 2024 levels.

Cash flow from operations remained solid, supporting the buyout of a key royalty obligation and maintaining a healthy balance sheet. Leverage metrics improved, positioning ANI for continued investment and resilience against sector volatility.

Executive Commentary

Strategic Positioning

1. Rare Disease Portfolio: Deepening Penetration and Evidence Generation

Cortrophin Gel continues to anchor ANI’s rare disease growth, with robust expansion into new prescribers and specialties. The launch of a pre-filled syringe format, designed to reduce administration steps, is expected to further support adoption. Evidence generation remains a priority, with new preclinical data in uveitis and a planned phase 4 trial in acute gouty arthritis flares targeting guideline inclusion and broader physician uptake.

2. Generics: Leveraging Exclusivity and Operational Agility

First-to-market launches and disciplined inventory management enabled generics revenue to outperform, with Prucalipride’s 180-day exclusivity providing a temporary but meaningful boost. Management expects Q2 generics revenue to moderate as exclusivity wanes, but mid-double-digit growth for the year signals operational strength and pipeline execution.

3. Retina Franchise: Navigating Access and Commercial Headwinds

Medicare Part B access disruption and patient support foundation funding shortfalls created a challenging Q1 for Illuvian and Utique, particularly in diabetic macular edema (DME). ANI responded with a bespoke commercial approach, regionally tailored, and is exploring specialty pharmacy and Medicare Part D pathways to restore access. Salesforce turnover is being addressed with top-tier talent recruitment, and April’s demand rebound suggests stabilization is underway.

4. U.S. Manufacturing and Tariff Readiness

ANI’s U.S.-centric manufacturing footprint (over 90% of revenue from U.S.-made products, less than 5% direct China reliance) positions the company as a relative winner in the event of pharma tariffs. Spare capacity in New Jersey and Minnesota plants provides further optionality to capitalize on potential supply disruptions affecting competitors reliant on offshore production.

5. Capital Allocation and Balance Sheet Strength

Strong cash generation enabled the buyout of a royalty obligation on Illuvian and Utique, reducing future outflows and signaling long-term confidence in the retina franchise. Net leverage improved to 2.7x trailing EBITDA, with forward guidance implying further deleveraging and flexibility for future investments or M&A.

Key Considerations

This quarter’s results reflect a clear strategic focus on rare disease expansion, operational excellence in generics, and proactive risk management in retina and supply chain. Investors should calibrate expectations to the following:

Key Considerations:

• Margin Mix Evolution: Royalty-bearing product growth and generics normalization will shape gross margin trajectory through 2025.
• Retina Franchise Recovery Pace: Execution on Medicare access solutions and salesforce stabilization remains critical for hitting full-year retina guidance.
• Rare Disease Pipeline Progress: Clinical trial milestones and new indication data could unlock incremental market opportunities for Cortrophin Gel.
• Tariff and Supply Chain Optionality: U.S. manufacturing scale offers a potential competitive moat if pharma tariffs or supply disruptions escalate.
• Balance Sheet Flexibility: Strong cash flow and reduced royalty burden support ongoing investment in commercial and R&D initiatives.

Risks

Medicare access headwinds for retina products remain unresolved, with foundation funding and specialty pharmacy pathways still in flux. Gross margin faces pressure from product mix shifts, and generics growth will moderate as exclusivity expires. Potential pharma tariffs could disrupt industry supply chains, though ANI is better positioned than most peers. Execution risk remains in achieving retina recovery and sustaining rare disease momentum, especially as the competitive landscape evolves.

Forward Outlook

For Q2 2025, ANI Pharmaceuticals guided to:

• Modestly lower total revenue and adjusted EBITDA sequentially, reflecting generics phasing and brands normalization.
• Retina revenues expected to recover as commercial execution improves and access pathways are implemented.

For full-year 2025, management raised guidance:

• Total revenue of $768 million to $793 million (25% to 29% YoY growth)
• Adjusted non-GAAP EBITDA of $195 million to $205 million (25% to 31% YoY growth)
• Cortrophin Gel revenue of $265 million to $274 million (34% to 38% YoY growth)
• Illuvian and Utique combined revenue of $97 million to $103 million

Management cited robust rare disease demand, generics outperformance, and early Q2 retina recovery signals as support for the raised outlook. Gross margin is expected to remain between 63% and 64% for the year, with rare disease mix offsetting generics normalization in later quarters.

• Second quarter revenue and EBITDA to be modestly lower than Q1, followed by sequential growth in Q3 and Q4.
• Continued investment in salesforce and evidence generation to underpin future growth.

Takeaways

ANI Pharmaceuticals’ Q1 results highlight the power of rare disease commercial execution and generics launch agility, but also underscore the operational and reimbursement complexity in retina. The company’s ability to sustain rare disease momentum, restore retina growth, and navigate margin mix will determine the durability of its raised full-year outlook.

• Rare Disease Outperformance: Cortrophin Gel’s prescriber expansion and new formats drove record growth, validating the multi-year franchise thesis.
• Retina Recovery Watch: U.S. access headwinds and salesforce turnover are being addressed, but full recovery will depend on execution and external funding dynamics.
• Margin and Supply Chain Optionality: Gross margin will be shaped by product mix, and U.S. manufacturing footprint provides a strategic hedge against industry-wide tariff or supply disruptions.

Conclusion

ANI Pharmaceuticals entered 2025 with strong momentum in rare disease and generics, raising guidance on robust Q1 execution. Retina remains a key variable, but early signs of recovery and proactive commercial adjustments provide a credible path to full-year targets. Margin mix, tariff policy, and clinical progress in rare disease will be the critical levers for investors to monitor in the coming quarters.

Industry Read-Through

ANI’s rare disease expansion and generics launch cadence reflect broader sector trends toward specialty focus and first-to-market advantage, reinforcing the value of commercial agility and pipeline execution. Retina access challenges highlight the vulnerability of Medicare Part B-dependent therapies to patient support funding volatility, a risk for all biopharma players in ophthalmology and other specialty categories. ANI’s U.S.-centric manufacturing and low China exposure position it as a potential relative beneficiary if pharma tariff policy tightens, providing a template for supply chain risk mitigation across the industry. Gross margin and mix management will remain sector-wide focal points as royalty-bearing and specialty products gain share.

ANIP Healthcare Pharmaceuticals Rare disease Generics Ophthalmology Tariffs Gross margin