Piper Sandler has initiated coverage on ANI Pharmaceuticals (NASDAQ:ANIP), an integrated specialty pharmaceutical firm that develops and markets branded and generic medicines.

The analyst notes that ANI’s business model has significantly transformed, shifting from a primary emphasis on generics to a new focus on integrating high-margin brand assets aimed at rare diseases. Cortrophin Gel (adrenocorticotropic hormone (ACTH)), the company’s lead asset, has been the centerpiece of that evolution.

Cortrophin gel sales more than doubled to $49.2 million in the second quarter of 2024, driven primarily by increased volume. The company raised the fiscal year 2024 Cortrophin gel outlook from $170 million-$180 million to $185 million-$195 million.

The FDA approved Cortrophin Gel in 2021, which covers several autoimmune diseases. At that time, there was only one other ACTH player, Mallinckrodt Plc’s (OTC:MNKTQ) Acthar Gel. The company and the drug have been associated with payer challenges, negative attention associated with the Medicaid rebate-related litigation and eventual settlement, and pandemic-associated disruption.

When ANI launched in the market, it identified significant promotion sensitivity linked to its relatively high-priced product, typically used after various more affordable immunomodulatory alternatives.

To address this, ANI developed a commercial framework concentrating on essential specialty areas, patient support systems, and market access.

Piper initiated with an Overweight rating and a price target of $68.

Earlier this year, ANI Pharmaceuticals acquired Alimera Sciences for $5.50 per share in cash and one non-tradable contingent value right (CVR) of up to $0.50 per share upon achieving certain net revenue targets in 2026 and 2027.

With the acquisition, ANI gained Iluvien and Yutiq, both intravitreal implantable forms of the corticosteroid fluocinolone for diabetic macular edema and non-infectious uveitis.

The transaction made sense, the analyst writes, especially since ANI had already established commercial infrastructure aimed at ophthalmologists to promote Cortrophin Gel, which is indicated for various ophthalmic conditions.

By incorporating Alimera’s current sales representatives, ANI can reach a broader pool of potential prescribers for Cortrophin Gel, thanks to the overlap with prescribers of Iluvien/Yutiq.

“ANI is well-positioned to de-lever considerably from the Alimera transaction in the next 12-18 months,” the analyst writes.

Price Action: ANIP stock is up 3.99% at $57.30 at last check Friday.

Photo: Illustration of Phrama lab worker created with MidJourney.

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This article ANI Pharmaceuticals Shifts Focus From Generics To High-Margin Brand Assets, Analyst Sees Strong Potential originally appeared on Benzinga.com

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